There are three reasons for attempting to reach a common understanding of the responsibilities of sovereign borrowers and their lenders. First, the flow of capital to sovereign debtors is exceptionally important to the world economy. Industrialized countries rely on it to finance their budget...

The external debt of emerging market sovereign borrowers is now mainly in the form of bonds held by numerous institutional and individual bondholders. Many of these bonds are governed by the law of the state of New York. As a matter of drafting convention, bonds for sovereign issuers governed by...