Sovereign debt more ‘enforceable’ – ECB paper
Results show creditors have used courts to “pressure” foreign governments
An erosion of legal standards has made sovereign default more “enforceable”, according to a paper published by the European Central Bank.
In their paper, Julian Schumacher, Christoph Trebesch and Henrik Enderlein use the first systematic collection of lawsuits filed against defaulting countries between 1976 and 2010 in the US and UK.
“We show that legal disputes in the US and the UK disrupt government access to international capital markets, as foreign courts can impose a financial embargo on
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