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Komfie Manalo, Opalesque Asia:

Nobel Prize winner in economic science Joseph Stiglitz has warned that the decision of the Argentinian government led by President Mauricio Marci to settle with hedge funds and bondholders of the country’s debt and pay legal fees for the so-called vulture funds is setting a bad precedent that "threatens many other countries in similar conditions."

Stiglitz, together with Martin Guzman, a research fellow at the Columbia University Business School and a senior fellow at the Center for International Governance Innovation, said in an article published at Pressenza, "This resolution will carry a high price for the international financial system, encouraging other funds to hold out and making debt restructuring virtually impossible. Why would bondholders accept a haircut if they could wait and get exorbitant returns for a small investment?"

They continued, "Most countries are (they add) intimidated by the creditors and accept what is demanded, with often devastating consequences. According to our figures, 52 percent of sovereign restructurings with private creditors since 1980 have been followed by another restructuring or default within five years. Greece, the most recent example, restructured its debt in 2012, and only a few years later it is in desperate need of more relief."

Macri has agreed to settle wi......................

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