Gregory Makoff, "Default: The Landmark Court Battle over Argentina's $100 Billion Debt Restructuring" (Georgetown UP, 2024)

Aug 20, 2024

In this discussion, Gregory Makoff, an expert in sovereign debt law, unveils the gripping saga of Argentina's $100 billion debt crisis. He delves into the complexities of international financial systems and the unique challenges nations face when defaulting. The podcast highlights the intense legal battles with holdout creditors and the critical role of the IMF in restructuring efforts. Makoff also discusses the political and economic chaos that followed the default, showcasing the dramatic interplay between courts, governments, and global finance.

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Intro

00:00 • 3min

Argentina's Debt Crisis: Lessons and Legal Battles

03:24 • 9min

The Turbulent Aftermath of Argentina's Default and Debt Struggle

12:47 • 6min

Battles of Debt: Argentina's Restructuring Crisis

18:27 • 6min

The Complicated Legacy of Judge Gresset in Argentina's Debt Crisis

24:15 • 4min

The Argentine Debt Saga: Negotiations and Legacies

28:08 • 26min

The dramatic inside story of the most important case in the history of sovereign debt law Unlike individuals or corporations that become insolvent, nations do not have access to bankruptcy protection from their creditors. When a country defaults on its debt, the international financial system is ill equipped to manage the crisis. Decisions by key individuals—from national leaders to those at the International Monetary Fund, from holdout creditors to judges—determine the fate of an entire national economy. A prime example is Argentina’s 2001 default on $100 billion in bonds, which stands out for its messy outcomes and outsized impact on sovereign debt markets, sovereign debt law, and IMF policy.

Default: The Landmark Court Battle over Argentina's $100 Billion Debt Restructuring (Georgetown UP, 2024) is the riveting story of Argentina’s sovereign debt drama, which reveals the obscure inner workings of sovereign debt restructuring. This detailed case study describes the intense fight over the role of the IMF in Argentina’s 2005 debt restructuring and the ensuing bitter decade of litigation with holdout creditors, demonstrating that outcomes for sovereign debt are determined by a complex interplay between financial markets, governments, the IMF, the press, and the courts. This cautionary tale lays bare the institutional, political, and legal pressures that come into play when a country cannot repay its debts. It offers a deeper understanding of how global financial capitalism functions for those who work in or study debt markets, international finance, international relations, and international law.

Gregory Makoff, PhD, is a senior fellow at the Harvard Kennedy School and a senior fellow at the Centre for International Governance Innovation and an expert on sovereign debt management. A former banker specializing in debt advice, liability management, and derivatives, he has also advised the US Department of the Treasury.

Caleb Zakarin is editor at the New Books Network.

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