Starting from the observation of an increased politicisation of the financial regulatory debate, the article analyses how this might impact the relationship between the European Union (EU) and the Basel Committee on Banking Supervision. The article first describes transnational financial networks after the global crisis and the shift from trust in technocratic autonomy to distrust and politicisation. It then turns to examine the legal bases for the participation of EU institutions in the Basel standard-setting process, discussing the challenges posed under EU law. The last part of the research focusses on the European Parliament’s attempts to become an active player in the transnational financial regulatory arena and on the role it might play to enhance the democratic legitimacy of the Basel process.
Sovereign bonds are actively traded in secondary markets and held by a broad community of creditors. The current profile of sovereign bondholders includes retail and institutional investors (banks, investment funds, pension funds, and insurance companies), also encompassing sovereign wealth funds, central banks, the IMF and similar organizations, as well as institutions like the ECB and the EIB. Bondholders have become increasingly diverse, numerous, anonymous and difficult to coordinate. To further complicate a common course of action, they might have conflicting interests, different drives and bargaining power, as well as significant information asymmetries.The fragmentation of the bondholders' profile poses a host of complex issues to the development of a dedicated workout mechanism for the restructuring of sovereign bond debt. In particular, the challenges raised by 'supranational creditors' are yet to be carefully addressed. This term is used to describe international organizations (like the IMF and the IBRD) and supranational institutions (like the ECB) when they purchase 2 sovereign bonds on the secondary market. These atypical sovereign bond investors are halfway between private retail investors and multilaterals providing financial assistance and they might pursue objectives other than mere profit.The paper addresses the question whether, in a debt restructuring, supranational creditors should be treated equally to other bondholders or should be given priority. In the 19th century and in the early years of the 20th century, most sovereign debt was in the form of bonds or loans disbursed by private banks (which granted mainly 1 While a State's domestic debt is usually governed by its national law, subject to the exclusive jurisdiction of national courts, denominated in domestic currency and predominantly held by residents, the external debt is traditionally governed by a foreign law, subject to the jurisdiction of a foreign court and denominated in foreign currency.2 Recently, also the issue of the so-called 'quasi-sovereign debt' has been raised, which refers to the debt incurred by subnational political entities (provinces, municipalities and the like), and by State-owned enterprises. While State-owned enterprises are usually able to borrow externally even when the government does not guarantee its repayment, in some cases the administrative regions of sovereignStates are prohibited by law to do so (for example, in the United Kingdom, but not in the United States).The global financial crisis highlighted the problems related to the debt owned by public enterprises, which in some cases was restructured on the same basis as sovereign debt, while in others was dealt with short-term trade financing or interbank credit lines). To deal with sovereign defaults, bondholders' committees 3 were established and, occasionally, western powers even engaged in gunboat diplomacy to recover debts owed to their nationals.After World War II, government-to-government loans became the preeminent form of borrowing a...
Starting from Paul Collier's assumption that 'economic development may be the true exit strategy for international peacekeeping', the chapter describes the evolution of the international financial institutions' engagement with fragile and conflict-affected States (FCSs). On the one hand, the World Bank initially engaged with post-conflict countries by only providing emergency recovery assistance. At the end of the 1990s, however, emergency assistance was completed by a specific policy on development cooperation in conflict-affected States. Nowadays, the IDA plays a central role in providing assistance to FCSs.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.