Why Ireland\u27s luck ran out and what this means for the Eurozone

Given its impressive economic performance over the past two decades, Ireland earned the title, the ‘Celtic Tiger’. However, as the contagion from the subprime-induced global financial crisis spread, Ireland\u27s boom went bust. In short order, Ireland (like Greece before it), had to seek financial assistance from the EU and the IMF to stave off sovereign default and national humiliation. How did Dublin and the eurozone respond to the crisis and what lessons can be learned from Ireland\u27s experience? While Ireland grapples with its huge public debt, the EU needs to instill confidence in the markets before the current rolling debt crisis becomes a systemic threat to the eurozone

Constructing the new international financial architecture : what role for the IMF?

Currently, policy-makers, financial analysts, academic economists and others are engaged in intense debates regarding the merits of capital controls, fixed versus floating exchange rate regimes, and dollarization, amongst other issues. Without doubt, the most contentious issue has to do with the role of the International Monetary Fund (IMF). An overview and critical analysis is provided of the debates over the role of the IMF. It is argued that the IMF\u27s role must be enhanced. Given its institutional resources, administrative capacity, worldwide membership, broad experience and technical and policy competence, the IMF can play an important role in coordinating global economic integration and crisis management

Resolving Sovereign Debt: Collective Action Clauses or the Sovereign Debt Restructuring Mechanism

When sovereign debt restructuring or debt reduction becomes unavoidable, what is the appropriate regime that can provide for an orderly restructuring, while at the same time protecting the rights of both creditors and the debtor? The recent wave of sovereign default has underscored the limits of the current market-based regime. Recently two alternative approaches propose a contractual approach by way of the introduction of collective action clauses (CAC) in bond contracts, and a statutory approach put forward by the International Monetary Fund (IMF), which calls for the establishment of an international debt restructuring mechanism (called the sovereign debt restructuring mechanism or SDRM) that would have many of the features of an international bankruptcy regime. This paper assesses the two crisis-resolution mechanisms. It shows that although no consensus exists on whether the best approach about how to manage and resolve sovereign debt crises is to promote the use of collective action clauses, or to create a statutory mechanism, it is, nevertheless, evident that the SDRM is shelved for the time being. It examines the reasons for this, and argues that to the contrary, a complementary approach that combines elements of both the CAC and the SDRM (now proposed by the IMF) has the potential to help reduce the unacceptably large costs associated with disorderly defaults by sovereign governments whose debt burdens have become unsustainable

India in 2009 : global financial crisis and congress revival

The past year was a momentous one for India. The country navigated through the shoals of an unprecedented global financial crisis with only modest negative impact, and successfully continued the world\u27s largest exercise in democracy. The 15th general election in April-May 2009 saw the venerable Congress Party return to power with a large mandate. On the external front, although ties between India and the Obama administration have been friendly, real concerns remain about the future trajectory of Indo-U.S. relations. Relations with Pakistan and China also remain testy