LAW 446 - Sovereign Debt

Globally, sovereign states have amassed over $60 trillion in debt. This course will examine the law governing this massive pool of obligations and the unique policy challenges that it presents. Our emphasis will be on the role played by lawyers and the financial industry, but we will also examine the parts played by government actors, the International Monetary Fund, and academic commentators. Government lending is governed by contracts written by the states and their creditors. Such contracts present complex legal questions. They often sprawl across multiple national legal systems. Because states can claim sovereign immunity, there are special challenges involved in enforcing such contracts. Finally, when sovereign states get into financial trouble there is no international financial trouble there is no international bankruptcy process that governs debt restructuring. We will examine all of these issues through the lens of historical and contemporary cases of government borrowing and default. There are no pre-requisites for this class.