A report by Columbia's Guzmán and Stiglitz advocates for New York legislation to reform debt restructuring for distressed countries. The professors argue that avoiding incentives for vulture funds and reducing accrued interest is vital for nations like Sri Lanka and Zambia, where debt service exceeds health spending. They highlight the state’s significant role, as half of global sovereign bonds are under its law. Reform could stabilize developing economies and reduce financial pressures affecting global trade and local taxpayers in New York.
Legislative reform is crucial in addressing debt crises in the Global South, as 3.3 billion people spend more on debt service than health care.
New York State law plays a pivotal role in global debt restructuring, with 50% of sovereign bonds issued under its jurisdiction impacting developing economies.
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