Report: Taming the vultures: Are new measures enough to protect debt relief gains?

This report was published by EURODAD

The actions of so-called vulture funds – or speculative investors in the debt of distressed companies or sovereign states – have grabbed international media headlines. Some of the dramatic media headlines have read: “Vultures leave the developing world hungry,” “How top London law firms help vulture funds devour their prey,” and “Vulture funds against poor countries.” The issue became a particularly hot topic in 2007 when it was revealed that a company by the name of Donegal International was suing the Government of Zambia in the London courts for US$ 55 million on a debt it had paid just US$ 3.2 million to acquire.

Since then, there has been a flurry of announcements by individual creditor governments – such as Belgium, the UK and USA – on steps they are taking to combat such practices. International bodies such as the European Commission, Paris Club and World Bank have also announced their own measures to combat so-called vulture funds.

This Eurodad report explains and critically assesses some of the recent official policy announcements and asks how robust they are. Will they achieve their stated aims, and what are some of the views and proposals of heavily indebted poor country governments themselves? It ends with a series of proposals which Eurodad believes could be more effective to tackle the problem in the long-term.

Read the report