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Full-Text Articles in Law
King Leopold's Bonds And The Odious Debts Mystery, Joseph Blocher, Mitu Gulati, Kim Oosterlinck
King Leopold's Bonds And The Odious Debts Mystery, Joseph Blocher, Mitu Gulati, Kim Oosterlinck
Faculty Scholarship
In 1898, in the wake of the Spanish-American war, Spain ceded the colony of Cuba to the United States. In keeping with the law of state succession, the Spanish demanded that the U.S. also take on Spanish debts that had been backed by Cuban revenues. The Americans refused, arguing that some of those debts had been utilized for purposes adverse to the interests of the Cuban people. This, some argue, was the birth of the doctrine of “odious debts”; a doctrine providing that debts incurred by a non-representative government and utilized for purposes adverse to the population do not need …
Shadow Banking And Regulation In China And Other Developing Countries, Steven L. Schwarcz
Shadow Banking And Regulation In China And Other Developing Countries, Steven L. Schwarcz
Faculty Scholarship
The rapid but largely unregulated growth in shadow banking in developing countries such as China can jeopardize financial stability. This article discusses that growth and argues that a regulatory balance is needed to help protect financial stability while preserving shadow banking as an important channel of alternative funding. The article also analyzes how that regulation could be designed.
A Sovereign’S Cost Of Capital: Go Foreign Or Stay Local, Michael Bradley, Irving Arturo De Lira Salvatierra, Mitu Gulati
A Sovereign’S Cost Of Capital: Go Foreign Or Stay Local, Michael Bradley, Irving Arturo De Lira Salvatierra, Mitu Gulati
Faculty Scholarship
A critical question faced by any sovereign seeking to raise funds in the bond market is whether to issue the debt under foreign or local parameters. This choice determines other key characteristics of any bond issue such as which banks, lawyers, and investors will be involved. Most important though, this decision involves a tradeoff between the sovereign retaining discretion in managing the issue and relinquishing control of the issue to third parties to prevent the sovereign from expropriating wealth from bondholders in the future. Based on a sample of 17,349 issuances by 117 sovereigns between 1990 and 2015, we investigate …
The Sovereign-Debt Listing Puzzle, Elisabeth De Fontenay, Josefin Meyer, Mitu Gulati
The Sovereign-Debt Listing Puzzle, Elisabeth De Fontenay, Josefin Meyer, Mitu Gulati
Faculty Scholarship
The claim that stock exchanges perform certification and monitoring roles in securities offerings is pervasive in the legal and financial literatures. This article tests the validity of this “bonding hypothesis” in the sovereign-bond market—one of the oldest and largest securities markets in the world. Using data on sovereign-bond listings for the entire post-World War II period, we provide the first comprehensive report on sovereigns’ historical listing patterns. We then test whether a sovereign bond issue’s listing jurisdiction affects its yield at issuance, as the bonding hypothesis would predict. We find little evidence of bonding in today’s sovereign-debt market. Instead, we …
Hard, Soft, And Embedded: Implementing Principles On Promoting Responsible Sovereign Lending And Borrowing, Anna Gelpern
Hard, Soft, And Embedded: Implementing Principles On Promoting Responsible Sovereign Lending And Borrowing, Anna Gelpern
Georgetown Law Faculty Publications and Other Works
This paper, prepared for UNCTAD’s initiative on responsible sovereign lending and borrowing, considers concrete strategies for implementing the Principles. It draws on studies in soft law and new governance, and on the recent experience in promoting best practices in international finance, including project finance, extraction revenue management, foreign aid, sovereign investment, and sovereign borrowing in the capital markets. It recommends maintaining the current non-binding character of the Principles, while embedding implementation in multi-stakeholder arrangements for ongoing disclosure, assessment, interpretation, and adaptation. This strategy has the best chance of changing behavior in sovereign lending and borrowing by creating constituencies for implementation …
Sovereignty, Accountability, And The Wealth Fund Governance Conundrum, Anna Gelpern
Sovereignty, Accountability, And The Wealth Fund Governance Conundrum, Anna Gelpern
Georgetown Law Faculty Publications and Other Works
Sovereign wealth funds – state-controlled transnational portfolio investment vehicles – began as an externally imposed category in search of a definition. SWFs from different countries had little in common and no particular desire to collaborate. But SWFs as a group implicated the triple challenge of securing cooperation between deficit and surplus states, designing a legal framework for global capital flows, and integrating state actors in the transnational marketplace. This Article describes how an apparently artificial grouping of investors, made salient by the historical and political circumstances of their host states in the mid-2000s, became a vehicle for addressing some of …