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AmericasOctober 1 2014

On the ropes: can Argentina recover?

A controversial US ruling against Argentina has shaken the world of sovereign debt restructuring and provided so-called vulture funds with a sharp new litigation strategy. As both multilateral organisations and private sector professionals attempt to stop a lawsuit pandemic, The Banker takes an in-depth look at the key issues. 
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On the ropes: can Argentina recover?

A wave of litigation against emerging market sovereigns is expected in the wake of the controversial US ruling against Argentina that led the country to default at the end of July.

Already Import-Export Bank of Taiwan is suing the Caribbean island of Grenada using the same legal argument used against Argentina. And many more cases could be on the way as the ruling serves as a precedent on litigation involving New York law-governed bonds. According to the International Monetary Fund (IMF), there is currently $900bn-worth of sovereign bonds governed by legislation other than that of the issuing countries. Just under half of this is governed by New York law.

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Silvia Pavoni is editor in chief of The Banker. Silvia also serves as an advisory board member for the Women of the Future Programme and for the European Risk Management Council, and is part of the London council of non-profit WILL, Women in Leadership in Latin America. In 2019, she was awarded an honorary fellowship by City University of London.
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