Sovereign Financing and International Law

The regulation of sovereign financing is a highly topical and significant issue, in the light of continuing global financial turmoil. This book assesses the role of international law in sovereign financing, addressing this issue from both legal and economic standpoints. It takes as a starting point the recent report 'Principles on Responsible Sovereign Lending and Borrowing' by the United Nations Conference on Trade and Development (UNCTAD). This report was endorsed by the United Nations General Assembly in its December 2011 Resolution on Debt, which emphasized the need for creditors and debtors to share responsibility for preventing unsustainable debt situations and encouraged all stakeholders to pursue the ongoing discussions within the framework of the UNCTAD Initiative. Investigating the legal and economic basis for the principles which were articulated in the report, the book develops a detailed and nuanced analysis of the controversial and complex issues they raise, including those concerning finance and credit rating agencies, contingent liabilities, debt management, corruption, fiduciary relations and duties, Collective Action Clauses, and the role of the EU and UN. Ultimately, it argues that the principles elaborated in the report correspond with general principles of international law, which provide a strong, pre-existing foundation upon which to build responsible principles for sovereign financing.PART 1 - SETTING THE GLOBAL SCENE ; 1. Introduction ; 2. Why the Need for Promoting Principles on Responsible Sovereign Lending and Borrowing? ; 3. Sovereign Debt Restructurings as Exercises of Public Authority: Towards a Decentralized Sovereign Insolvency Law ; PART 2 - LEGAL STATUS OF THE PRINCIPLES ; 4. Legal Status of UNCTAD's Principles on Responsible Sovereign Lending and Borrowing ; 5. Out of Thin Air? Tracing the Origins of the UNCTAD Principles in State Practice ; PART 3 - COMPARATIVE STUDIES: GENERAL PRINCIPLES ; 6. Legal Stipulations of Sovereign Lending and Borrowing in Domestic Jurisdictions ; 7. The Legal Contours of Sovereign Debt Restructuring under the UNCTAD Draft Principles ; PART 4 - DEBT MANAGEMENT ; 8. Improving Debt Management on the Basis of UNCTAD's Principles ; 9. UNCTAD's Principles and the United Nations Convention against Corruption. Links and joint strategies ; 10. Fiduciary Relations: Legal Framework and Implications for Responsible Sovereign Debt Management ; 11. Current EU Mechanisms to Tackle Sovereign Insolvency: An Analysis Against the Benchmark of the UNCTAD Principles ; PART 5 - CHINA AS A CASE STUDY ; 12. China's Governmental Preferential Loans and the Performance of its Lending Responsibility - Take China Export-Import Bank as an Example ; 13. Debt Crisis Prevention for China as the Biggest Sovereign Creditor and the Principles ; PART 6 - TWO KEY ISSUES ; 14. Restructuring a Sovereign's Contingent Liabilities ; PART 7 - OUTLOOK AND IMPLEMENTATION ; 15. Producing Change in Sovereign Lending Practices ; 16. Implementation of the Principles on Responsible Sovereign Financing ; PART 8 - CONCLUSIONS ; 17. Concluding Remarks in the Light of International Law