Establishing international bankruptcy mechanism
Claim: An international debt arbitration panel should be established to ensure that financial crises and sovereign debt obligations do not place undue burdens on countries and to prevent a liquidity crisis from becoming a solvency crisis. When sovereign debt service threatens the welfare of a country's people, the panel would restructure and/or cancel debts so as to ensure that important social services are not compromised in an effort to meet debt obligations. In a financial crisis, the panel would prevent a liquidity crisis from becoming a solvency crisis by arbitrating an agreement that meets the needs of sovereign debtor and creditor thereby helping reduce the need for bailouts by the international community.
Type Classification: F: Exceptional strategies