Sovereign debt in the spotlight at Business School conference

Olivier Blanchard, Chief Economist at the IMF, gave the keynote speech at a Business School conference

The International Monetary Fund's Chief Economist was among those speaking at a major conference on sovereign debt restructuring this month.

Sovereign debt is the money owed by a country’s central government and it has become a headline issue since the Global Financial Crisis. Greece is one example of a country that is struggling to repay its sovereign debt and, as a result, has sought to renegotiate the terms of repayments with its creditors.

Olivier Blanchard, Chief Economist at the IMF and one of the most cited economists in the world, gave the keynote address at the conference, which was jointly organised by the Brevan Howard Centre for Financial Analysis (part of Imperial College Business School), the Initiative on Global Markets at the University of Chicago Booth School of Business, and the International Insolvency Institute.

IMF Lending Framework

Delegates heard Mr Blanchard discuss the evolution of the IMF Lending Framework, which required adjustment following the Global Financial Crisis. He explained the issues surrounding debt reprofiling, concessional financing and contagion and the IMF’s current thinking around the issues.

He told the conference: “Countries with debt are not helped by adding more debt to them. The IMF is therefore looking for ways to improve its Lending Framework.”

The conference, which took place in London, attracted a wide-range of high-profile delegates from organisations including the Bank of England, Federal Reserve, European Central Bank, OECD, Bank for International Settlements, and the Bank of Japan.

Delegates, who also included leading academic economists, legal scholars and private investors, listened to panel discussions covering learnings from recent events, collective action clauses as restructuring mechanisms and proposals for formal restructuring.

Franklin Allen, the Executive Director of the Brevan Howard Centre and Professor of Finance and Economics at Imperial College London, said: “Sovereign debt restructuring is an issue which many nations are grappling with, following the Global Financial Crisis. The conference was an important opportunity to bring together some of the world’s leading experts to discuss ideas and approaches. We are very grateful to Olivier Blanchard for his thought-provoking keynote address as well as all the other speakers who made the conference such a resounding success.”