A crisis far beyond anything experienced in recent memory -
The way in which regulators, investors, banks and governments respond to the current sovereign debt challenges will echo for many years. Decisions made today will, for better or worse, continue to have consequences far beyond our current time horizon. Getting it right will not be easy.
As the experts outline in the following pages, there is no doubt that the world financial system has some very real issues to resolve: how to manage the unprecedented levels of sovereign debt to the satisfaction of those concerned, and how to design a system of arbitration, testing and resolution that will prove robust enough for even the thorniest dispute.
To achieve this, there must be recognition of some truths: First, holdouts—bondholders who withhold their consent and retain their right to seek the full payment of original bonds—are not the primary problem in the sovereign debt debate. Certainly they can slow down the refinancing process, but to focus on holdouts would be to miss the central elements of concern...
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