Stiglitz Backs NY Bills That Cap EM Payouts as Trade Groups Fret

Economist Joseph Stiglitz and two former Latin American officials are backing New York bills that stand to limit the amount private creditors can recover in sovereign debt restructurings — just as Wall Street trade groups ramp up opposition.

“The incentives for debtors and creditors need to be changed urgently,” according to a memo signed by Stiglitz, former Argentina economy minister Martin Guzman and Colombia’s recently ousted finance chief Jose Antonio Ocampo. “The legislation would instantly provide the protection for borrowers that need a debt renegotiation.”

The measures — comprised of proposals in both the state senate and assembly — ...