ABSTRACT
The emerging market financial crises of the last decade have prompted widespread concern about the adequacy of the present international financial architecture to maintain a stable international economy. Recently, attention has focused on the framework for the renegotiation and restructuring of developing country debt. Prolonged and costly sovereign debt renegotiations are widely taken as evidence of inefficiencies in international financial markets that should be addressed by institutional innovation. The possibility that these result from the inability of various creditors to co-operate effectively in debt restructurings has been a concern for many years in many debt crises. Market participants, academics and policymakers have offered a variety of explanations and proposed solutions for collective action failures between lenders in the resolution of sovereign debt problems.
