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14 Law & Bus. Rev. Am. 495 (2008)
Responsibility for Abusive Granting of Sovereign Loans

handle is hein.journals/lbramrca14 and id is 505 raw text is: RESPONSIBILITY FOR ABUSIVE GRANTING OF SOVEREIGN LOANS' Juan Pablo Bohoslavsky* I. ABSTRACT P77HIS article develops two main points in the theory of responsibility for abusive granting of credit: first, the various case laws and doc- - trines developed in national legal systems (France, Belgium, Italy, Germany, the United States, England, Spain and Argentina) are summa- rized into a general theory of the responsibility for abusive granting of credit; second, it is argued that this general theory can be extended from private law to a general principle of international law, and thus can be applied to sovereign insolvency, and a specific example of such an applica- tion of the theory is sketched out. Furthermore, by way of an introduction, we explain the economic causes of sovereign over-indebteness, focusing on the behaviour of creditors. We conclude that under restricted conditions, with a limited scope, and without disregarding the varied nature of the players (the state and its credi- tors of various kinds), there would be legal and economic justification for extending the application of the rules established in the original abusive credit context to sovereign debt. In particular, loans granted without fol- lowing the most elementary prudential guidelines with regard to the analy- sis of credit risk should be subordinated to those not classified as abusive in the case of bankruptcy. II. DESCRIPTION OF THE PROBLEM Over the last few decades, commercial law in Europe and certain coun- tries in the Americas have been confronted with a highly complex issue, both factually and legally: the responsibility of banks for the abusive granting of loans. Legal doctrine, and to a lesser extent case law, has put a lot of thought and effort into developing a balanced approach towards this problem, which remains a salient topic for debate among legal * Fellow at Hauser Global Law School Program, New York University; European Ph.D., Salamanca University; LL.M., Austral University. 1. This paper is a summary of the European Ph. D. thesis at the Faculty of Law, University of Salamanca, 2007. I would like to thank my tutors, Professors Fer- nando Carbajo Casc6n (University of Salamanca) and Kunibert Raffer (University of Vienna).