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ஜெனரல்
The International Monetary Fund (IMF) has issued a cautionary statement regarding proposed legislation in New York aimed at altering the process of sovereign debt restructuring. The IMF spokesperson expressed concerns that the proposed changes, which include introducing a bankruptcy-like adjustment process under New York law, could introduce significant uncertainty into the existing debt restructuring framework. While acknowledging the intention to bring more order to the process, the IMF warns that these changes may risk complicating and prolonging debt restructurings in countries like Sri Lanka, potentially impacting the timeliness and predictability of such procedures. The IMF has not made formal recommendations but advocates for a contractual approach to debt restructuring, emphasizing the importance of consultation with all stakeholders.
The proposed legislation has sparked a contentious debate, with Wall Street opposing the measures while politicians, activists, and charities support them. At the heart of the issue is the governance of approximately $800 billion in outstanding hard-currency bonds issued by developing nations, which fall under New York law. Current practice involves negotiation between investors and governments after defaults occur, but recent struggles in reaching agreements have prompted calls for legal oversight. While some argue that the proposals could ensure equitable burden-sharing between private bondholders and public creditors, concerns remain about the scope and language of the bills. Suggestions have been made to refine the wording to limit eligibility and clarify burden-sharing standards, highlighting the need for careful consideration and revision to address potential flaws while preserving the intended benefits of the legislation.
