Value Recovery Instruments: A Contrarian View

We often turn to veteran sovereign debt lawyer Mark Stumpf to help us understand the intricacies and history of the sovereign debt markets. He joins us to discuss a recent IMF report on the use of contingent debt instruments. In particular, we discuss Value Recovery Instruments, such as separately-traded GDP warrants. One view of these instruments, which appears in the IMF report and elsewhere, is that they should be standardized and easily tradable. Mark thinks this view is misguided—that VRIs should be nontransferable and bespoke. He joins us to explain why. We also get to take advantage of Mark’s encyclopedic knowledge of sovereign debt history to discuss the Louisiana Purchase, gunboat diplomacy, and other topics.

Producer: Leanna Doty