Sovereign Debt Forum

The Sovereign Debt Forum (SDF) is the result of a collaboration between the Centre for Commercial Law Studies at Queen Mary University of London and the Institute of International Economic Law at Georgetown University Law Center and was launched at the International Monetary Fund in Washington DC on 21, October 2019. The European University Institute joined the SDF as a member in the spring of 2020.

The Forum’s Academic Directors are Rosa Maria Lastra (Queen Mary University of London) and Anna Gelpern (Georgetown Law), and the Forum’s founding members include also Lee Buchheit (University of Miami School of Law), G. Mitu Gulati (University of Virginia), and Sean Hagan (Georgetown Law). The Forum’s affiliated scholars include Rodrigo Olivares-Caminal (Queen Mary University of London), Ugo Panizza (Graduate Institute of Geneva), Mark Weidemaier (University of North Carolina), Daniel Bradlow (University of Pretoria), and Stephen Park (U. of Connecticut).
 
The SDF serves as an interdisciplinary research hub and platform for capacity building, policy development, and research-dissemination programs. The Forum’s capacity building work focuses on low- and middle-income countries at risk of sovereign debt distress, as well as countries that have recently gained market access and have limited debt management experience.  Forum activities include: 

• Conducting and disseminating innovative, policy-relevant interdisciplinary research on all aspects of sovereign debt management.
• Development and delivery of capacity-building programs with emphasis on the legal aspects of sovereign borrowing, debt management, restructuring, and litigation. 
• Convening experts, researchers and practitioners from diverse academic, policy, and market spheres; organising conferences, seminars, and policy fora.

The SDF has an official sector consultative group which meets twice a year to coordinate action in terms of research projects, training programs, SDF strategic direction and analyse sovereign debt issues. Official Consultative Group Members come from the Following Institutions: African Legal Support Facility, Central Bank of Ghana, Central Bank of Peru, International Monetary Fund, Ministry of Finance of Italy, Ministry of Finance of Netherlands, Paris Club Secretariat, HM Treasury and the World Bank Group. The SDF receives funding from the Ministry of Economic Affairs and Climate Policy of the Netherlands.

The Sovereign Debt Forum Launch took place at the International Monetary Fund in Washington DC on 21 October 2019, in conjunction with the Annual Meetings of the IMF and the World Bank. On 10 June 2020, Sovereign Debt experts and policy officials from the IMF and the World Bank consider the rising tide of debt distress, further aggravated by the Covid-19 pandemic, and review historical precedents, legal and policy options for managing the crisis in low- and middle-income economies. In September 2020, the Fourth Interdisciplinary Sovereign Debt Research and Management Conference (DebtCon4) took place in September 2020 with format changes to adapt to the Covid-19 pandemic will be announced in June 2020. D-DebtCon was an innovative event which was live in 9 countries and 5 different continents under the auspices of the Sovereign Debt Forum.

Initiatives of the SDF include:

• Virtual legal training program with the World Bank on 19 – 22 October 2020. These legal training program aimed to support capacity-building for debt managers (participating officials from Cambodia, Benin, Guinea, Liberia and others) on sound legal frameworks for a variety of debt obligations, including the drafting and negotiating key provisions in commercial debt instruments, collateralized debt, guarantees and contingent liabilities, and debt restructuring. Also in collaboration with the World Bank, in March 2021 the SDF held another virtual training program on ‘Legal Aspects of International Borrowing’.
• On Wednesday 9 December 2021, the Soverign Debt Forum hosted a lunch discussion of IMF staff research analysing policymakers’ decision to restructure sovereing domestic debt.
• The SDF was part of the IMF-African Training Institute Course on Debt Sustainability and Debt Restructuring, which took place from 31 January to 3 February 2022. SDF scholar and CCLS Visiting Professor Lee Buchheit lectured on “The International Architecture for Sovereign Debt Restructuring” together with SDF scholars Professors Lastra, Gelpern, Hagan, and Olivares-Caminal.
• The SDF together with the IMF-African Training Institute conducted a course "Debt Sustainability and Debt Restructuring (DSDR) II”, which took place online from April 4-8, 2022. ‘Debt Sustainability and Debt Restructuring (DSDR) II’ SDF founding member Professor Lee Buchheit lectured on the ‘Legal Aspects of International Borrowing’. He introduced the dynamics of international borrowing; he explained the motivations of lenders and borrowers in negotiating credit documents; he reviewed the purposes served by the principal contractual clauses in credit documents and illustrated the ways in which borrowers can negotiate these clauses ( i) the Process of Bond Offerings, ii) Collective Action Clauses, and iii) Trustees, Fiscal Agents and Payment Mechanics).
• DebtCon5 - The European University Institute hosted the 5th edition of the Interdisciplinary Sovereign Debt Research and Management Conference, on May 25-27, 2022 in Florence, (Italy). The objective of DebtCon5 was to discuss state-of-the-art interdisciplinary research on sovereign debt and related policy issues, and to foster interaction among academics, senior policymakers and supervisors, industry representatives, and other practitioners. The conference included both high-level roundtables, where practice, policy and research were met, and parallel sessions, where research papers were presented. DebtCon6 was held in collaboration with Princeton University in April 2023.
• On 20 June 2022, the SDF conducted the Workshop on ‘Law, Debt and Sustainability: Re-thinking DSA’s’. SDF scholars discussed the definition and effect of economic environmental social and governance (EESG) factors on sovereign debt sustainability. The group of experts considered how the incorporation of these factors into DSAs could improve assessment of financial and macroeconomic sustainability as well as account for broader definitions of sustainability applicable to sovereign debt. This event was co-sponsored by the Project on Public Finance and Human Rights.
• On 23 June 2022, a seminar on Recent Development in Sovereign Debt Markets and the Banking Sector in the Euro Area and Worldwide took place at the Bank of England.
• On 14 September 2022, the SDF hosted a diverse panel of experts to examine questions surrounding the Common Framework and its ability to provide meaningful debt relief. Wither the Common Framework.
• On 31 October 2022, the SDF held an event ECB Transmission Protection Instrument: an anti-fragmentation tool in sovereign debt markets with a panel discussion directed by Prof Lastra, including Lee Buchheit, Daniel Gros, Ignazio Angeloni, Luis Garicano, Sara Dietz.

The SDF leads a number of research projects including the collateralization of public debt and authorization frameworks for debt management. This latter research project, led by Professors Gelpern and Hagan, in collaboration with the World Bank consists of two parts: (i) a survey of legal systems in a diverse group of countries and (ii) an overview of New York and English courts cases where external debt was not domestically authorized. The project highlights the importance of disclosure of authorization requirements.

The SDF has also been active in research and advice linking environmental protection and sovereign debt restructuring For example, Lee Buchheit offered advice to Belize linking debt restructuring to marine conservation. Climate-related debt relief should be seen in relation to other solutions such as the development of new sustainability markets including green bond issuance.  Together with SDF affiliated scholars Danny Bradlow and Stephen Park, Rosa Lastra has conducted a workshop with the aim to incorporate the definition and the effects of economic, environmental, social, and governance (EESG) factors into debt sustainability analyses (DSAs). This discussion feeds into the World Bank– IMF Debt Sustainability Framework for Low-Income Countries (LIC-DSF) review.

When the Common Framework was launched by the G20 in November 2020, it was celebrated as a breakthrough, and for good reason: it promised a fundamental and long-overdue shift in the sovereign debt-restructuring regime at a critical time. The creditors who signed on to the framework included China, which had become the largest official bilateral creditor to low-income countries, but had been reluctant to join established restructuring institutions, such as the Paris Club. However, almost two years on, the IMF, the World Bank, and a host of other policy, civil society, and market stakeholders are raising concerns about the Common Framework’s failure to deliver meaningful debt relief. Therefore, what is the problem, and how can it be fixed?  The Sovereign Debt Forum hosted panel of experts to examine these questions from diverse perspectives as part of the Sovereign Debt Forum’s regular webinar series on the pressing challenges facing the international community in sovereign debt and related areas.

On 26 May 2022 a virtual panel to mark the release of the IMF’s Reviews of the Fund's Sovereign Arrears Policies and Perimeter was organized under the auspices of the SDF. The expert panel discussed the findings of this IMF policy review against the background of rising public and private debt stocks, and acute sovereign debt vulnerabilities in a growing number of countries around the world.