Dr Karina Patricio Ferreira Lima plays key role in UK Parliamentary Roundtable on Legislative Solutions for Sovereign Debt Crises

In a considerable advancement towards addressing the global challenge of sovereign debt crises, Dr Karina Patricio Ferreira Lima played a pivotal role in a recent UK parliamentary roundtable in London

This distinguished event, chaired and attended by Members of Parliament, alongside lawmakers and advisors from New York, prominent economic and legal scholars, and civil society representatives from around the globe, served as a crucial platform for presenting innovative legislative reforms aimed at alleviating sovereign debt distress in developing countries.

The roundtable reached a unanimous decision to advance a draft bill based on the proposals co-authored by Dr Karina Patricio Ferreira Lima, Dr Stephen Connelly, and Professor Celine Tan from Warwick Law School. These proposals are set to support global efforts to resolve the pressing issues of sovereign debt crises, particularly in low-income and developing economies.

Outlined in a joint Policy Briefing by the Centre for Business Law and Practice (CBLP) at the University of Leeds School of Law and the Centre for Law, Regulation and Governance of the Global Economy (GLOBE) at Warwick Law School, the proposals are crafted to address the current challenges in sovereign debt restructuring, particularly the difficulty of securing private creditor participation. Given that up to 90% of the debt owed by low-income countries to private creditors is governed by English law, the UK is uniquely positioned to influence the resolution of these crises through domestic legal reforms.

These legislative proposals aim to promote a more effective and equitable negotiation process among creditors and to foster a co-ordinated approach to debt restructuring processes. They seek to complement ongoing efforts towards developing market-based and contractual solutions for managing sovereign debt crises, such as the incorporation of majority voting provisions and climate-resilient debt clauses.

Reflecting on the collaborative journey leading to this significant moment, Dr Patricio Ferreira Lima stated:

Since 2020, we have been closely working together to craft legislative solutions that the UK Parliament could adopt to facilitate private creditor involvement in sovereign debt restructuring, especially for low-income countries. I firmly believe that the UK government has a pivotal role to play in addressing the sovereign debt crisis affecting developing and emerging countries, which is further exacerbated by intersecting food, energy, and climate-related crises that have profound impacts on social and economic development globally. It is crucial for the UK government to consult on these legislative proposals to incentivise private creditors to engage in coordinated debt restructuring processes, thereby enhancing multilateral debt relief initiatives to resolve this crisis.

The involvement of Dr Patricio Ferreira Lima in this UK parliamentary roundtable and legislative proposals underscores the critical role of academic research and collaboration in formulating policies to tackle complex global challenges. The University of Leeds School of Law takes immense pride in Dr Patricio Ferreira Lima’s contributions to this vital international effort, reflecting our commitment to fostering sustainable solutions for the pressing issues facing the global community.

Dr Patricio Ferreira Lima is a member of Centre for Business Law and Practice and can be found on X/Twitter @KPatricio_

She has also arranged a 'best essay' prize sponsored by Trade Finance Global.