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IMF Releases Paper on Ending Predatory Behavior
The International Monetary Fund (IMF) officially released a major paper focused on increasing stability in the financial system and preventing predatory hold-out behavior in debt restructuring.
The International Monetary Fund (IMF) officially released a major paper focused on increasing stability in the financial system and preventing predatory hold-out behavior in debt restructuring. Last Monday's ruling by the Supreme Court in NML Capital vs. Argentina has legitimized predatory behavior that the IMF, US Government and legitimate investors seek to stop. The IMF paper was the second paper that reviewed potential aspects of an international bankruptcy process for the IMF Executive Board.
"It's clear that the IMF is looking for innovative ways to thwart the predatory behavior that was just legitimized by the Supreme Court," stated Eric LeCompte, Executive Director of the religious financial reform coalition known as Jubilee USA Network. "You can see in the paper that long before the Supreme Court ruling, the activity of these hedge funds has been on the IMF's radar."
The IMF paper notes the problems with current approaches to deter predatory behavior and promises a stand-alone paper in the near future on restricting the practice. Primarily, the paper focuses on creating more predictability in the financial system and preventing the "contagion" that spurs regional and global financial crises. IMF staff are attempting to build consensus on a set of financial issues in a series of papers and board discussions. A third paper on creating greater predictability in the global financial system is expected from the IMF by year's end.
"Greater predictability in the markets protects the vulnerable and ensures that the financial system serves all of us," noted LeCompte. "It's unclear how far the IMF can go. It's imperative that global decision makers take seriously the threat of another financial crisis. It's not a matter of if a financial crisis will strike again, it's a matter of how soon it will strike."
Read the IMF's paper: http://www.imf.org/external/np/pp/eng/2014/052214.pdf
Jubilee USA Network is an alliance of more than 75 US organizations, 400 faith communities and 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. http://www.jubileeusa.org