The UN General Assembly passed a historic resolution to begin treaty negotiations to enact a global bankruptcy process and stop predatory hedge funds.
The resolution passed by a super-majority vote of 124-11 with 41 abstentions. The US voted no along with 10 other countries.
The bankruptcy process could make it more difficult for hold-out investors to block countries from debt restructuring and could limit future defaults. "The strong majority vote shows how powerful the global consensus is to stop predatory financial behavior," noted Eric LeCompte, Executive Director of the religious debt relief organization, Jubilee USA. "If we are going to solve what global leaders believe is the root cause of inequality, we need a bankruptcy system in place."
LeCompte serves on UN expert groups working to create an international bankruptcy process. Adam Smith, founder of modern economics, argued in favor of a sovereign country bankruptcy process.
The United Nations resolution passed in the wake of Argentina's legal dispute with hold-out investors and predatory hedge funds. During today's session of the UN General Assembly the United States government argued that there needs to be more stability in the global financial system and an end to predatory behavior. However, the US government was one of a handful of countries who voted against the resolution while defending a market-based solution. "The United States has led for 15 years on debt relief and has been a powerful voice against predatory behavior," said LeCompte. "I along with the entire faith community is so deeply saddened that the US government voted against our debt relief efforts. Our leaders failed us today." Jubilee USA Network is an alliance of more than 75 US organizations, 400 faith communities and 50 Jubilee global partners.
Jubilee's mission is to build an economy that serves, protects and promotes participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people.
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