MercoPress. South Atlantic News Agency
IMF warns about 'default' costs for Argentina; calls for debt restructuring mechanisms
The IMF's chief economist warned that a default by Argentina in its battle with holders of its defaulted debt may hurt its economy and the global financial system. Argentina continues to face the fallout of its 2001 debt default, which plunged the country into an economic crisis it is still battling to overcome. Read full article
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Disclaimer & comment rules“ Restructure debt” Does that mean that I can borrow £ 1000 from lets say Barclays Bank and then say I want to “restructure my debt”? I think I know the answer to that. Why have we to even think that countries want to “restruture” surely they ( countries ) would want to repay their debt, or I missing something.Incidently I currently have a loan from a bank and religiously make payments every month but then the bank can TRUST me.
Jul 26th, 2014 - 07:16 am - Link - Report abuse 0What is it with the IMF? How many other countries are likely to be as crooked as argieland? Argieland didn't “negotiate” with bondholders, it issued an ultimatum. FACT.
Jul 26th, 2014 - 09:26 am - Link - Report abuse 0“If Argentina pays the so-called ”holdout“ hedge funds -- which it calls ”vulture” funds -- 100% of the 1.3 billion it owes them, it could be forced to pay all remaining creditors in full, as well.” NOT FACT.
A thing called the RUFO clause. (Rights upon Future Offers). Where's the “Offer”? Argieland complying with the Judge's order is not an “Offer”.
Argentina could have asked the IMF to manage the last default.
Jul 26th, 2014 - 11:20 am - Link - Report abuse 0They didn't
Now they're going into another and they are out of status at the IMF
Good luck!
Brr
“Blanchard said the Argentina case means “there's much more uncertainty as to how we'll be able to restructure debt for others countries in the future.”
Jul 26th, 2014 - 03:05 pm - Link - Report abuse 0The peasant Blanchard doesn't have a clue to what he is blabbering about.
Since 2005, 99.6 percent of all sovereign bonds have had a collective action clause which means that holdouts are a thing of the past.
FOLK'S he's an economist and an IMF one at that.
Jul 26th, 2014 - 04:03 pm - Link - Report abuse 0Remember what they say about economists: put six economists in the same room with the same problem to sort out and you will have TWELVE and upwards answers. Handwringing doesn't come into it.
@1
Jul 26th, 2014 - 05:39 pm - Link - Report abuse 0Precisely. If a private person or even a corporation can't pay back their debts there is a bankruptcy structure in place where debts can be resolved and assets reallocated if necessary.
But for sovereign nations there is no worldwide bankruptcy court that banks can go to if a country doesn't pay its debt. So when banks lend money to a country that they suspect may not pay it all back, they sometimes insist on having any legal disputes regarding the debt resolved in whatever real court that they feel has the greatest likelihood of being able to force some form of repayment. In this case it was the US courts.
Every once in a while some “world official” (like this guy above) calls for a “mechanism” for resolving sovereign nations debt if they can't pay back (in other words, an international bankruptcy court).
The problem is, for such a court to be effective, and have teeth to any ruling, every country in the world would have to give up some measure of sovereignty to such a court (in other words, they would have to sign a binding treaty that they will abide by the courts ruling even if it goes against their own country's laws).
There are many countries in the world who would never sign such a treaty (especially the U.S.), so it will never happen.
These guys are of course smart enough to know that...
If Argentina defaults (fingers crossed) CFK and Co will blame everyone else. (as usual).
Jul 26th, 2014 - 06:30 pm - Link - Report abuse 0What is the betting, that when Argentina sinks and goes under, David will increase overseas aid to her,
Jul 26th, 2014 - 06:32 pm - Link - Report abuse 0after all, according to Money bags David, everybody else's problems affect us, and so becomes our problem..
wait and see.
They should have the money to pay everyone if they haven't done something they shouldn't have done with all the money
Jul 27th, 2014 - 02:07 am - Link - Report abuse 0Commenting for this story is now closed.
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