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Responsible sovereign lending and borrowing as a response to the present and future financial and political crises

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My presentation at the CIMA EuroMed Forum - Kadir Has University, Istanbul, 13-15 April 2011

My presentation at the CIMA EuroMed Forum - Kadir Has University, Istanbul, 13-15 April 2011

Published in Economy & Finance , Business
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  • 1. Responsible sovereign lending and borrowing as a response to the current and future financial and political crises
    CIMA, Euro-Mediterranean Forum , KadirHas University
    Istanbul, 13-15 April 2011
    George Papadopoulos,
    Attorney at Law,
    PhD cand. LL.M. (Univ. of Athens),
    LL.M. (Univ. of Cambridge)
  • 2. “In finance, everything that is agreeable is unsound and everything that is sound is disagreeable”
    Winston Churchill, 15 March 1926
  • 3. Sovereign debt. A factor of the current financial and political crisis
    Excessive borrowing and mismanagement of public funds
    Odious debts and financing of autocratic regimes
  • 4. Distinguishing features of sovereign debt
    Features of sovereign debt that put responsible lending and borrowing at risk
    Intergenerational tensions
    Mixed motives for lenders
    Legal immunity
    Features of sovereign debt that (should) encourage responsible lending and borrowing
    Fiduciary duties
  • 5.
  • 6. Responsible sovereign lending
    Realistic assessment of the borrower’s creditworthiness and its ability to repay the loan
    Duty to inform and advise
    Due diligence
    Human rights considerations (cf. Equator Principles)
    International law
  • 7. Responsible sovereign borrowing
    Disclosure (Cf. IMF’s Special Data Dissemination Standard )
    Rule of law
  • 8. Best practices (A)
    Debt Management Offices
    External Audit Mechanism
    Independency (cf. INTOSAI’s Mexico Declaration)
    Competence
    Auditing disclosed debt information
    Commenting on the fiscal and economic implications
    Control of the legality and regularity of financial management and accounting
    Performance audit (“value for money” audit; the 3Es)
  • 9. Best practices (B)
    Contract Drafting
    Exit consent
    Collective Action Clauses (CACs)
    Pro rata sharing clauses
    Non-acceleration or no-action clauses
    Collective representation or engagement clauses
    Reframing paripassuclauses
  • 10. Responsible sovereign lending and borrowing principles in the context of debt renegotiations
    Factual and legal obstacles
    Possible solutions
    Reexamining the role of Credit Rating Agencies (CRAs)
    Through the Paris Club
  • 11. Legal Defences
    Breach of duty to inform and advise
    Breach of fiduciary duties
    Corruption and fraud
    Unclean hands – Abuse of right
  • 12. George PapadopoulosPhD (cand.), LL.M. (Univ. of Athens), LL.M. (Univ. of Cambridge) Contact: george-papadopoulos@cantab.net