Sovereign Bonds and Lacuna in International Law

Document Type : academic

Authors

1 Associate Professor in International Law, Faculty of Law, Shahid Beheshti University, Tehran

2 Ph.D. Student of International Law, Faculty of Law Shahid Beheshti University, Tehran

Abstract

Liberalization of financial services and the progressive internationalization of capital markets that were deemed to be the building blocks for a new international financial order in which inclusive economic growth and prosperity for all human beings would be achieved and financial stability would be well maintained, have paved the way for one of the biggest global financial crises i.e. Sovereign Debt Crisis. This article elaborates current debt crisis including the regulatory framework of international sovereign bond markets and the existing mechanisms proposed for orderly resolution of sovereign bond disputes and argues that the current crisis has provided ample evidence that the existing international financial order which is excessively fragmented, has failed in achieving financial stability and inclusive growth and the contractual solutions are inadequate and inefficient in restructuring sovereign bonded debts. It concludes that efficient resolution of sovereign debt crisis requires further developments in international financial regulation and more coherent and coordinated efforts to design an international legal framework governing sovereign debt workouts with a view to balance the interests of the debtor state and its population and the bondholders’ rights.

Keywords

References

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International Law Review
Volume 37, Issue 63 - Serial Number 63
October 2021
Pages 111-138

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History

  • Receive Date: 29 June 2019
  • Revise Date: 30 November 2019
  • Accept Date: 01 December 2019

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