Geneva, A United Nations expert has commended the New York State Legislature’s current discussions on the Sovereign Debt Stability Bill, urging its adoption to improve the restructuring process for nations facing default. This legislation aims to introduce a more transparent procedure for states in economic distress to efficiently manage their debts, potentially expediting their economic recovery and ensuring fair treatment in negotiations with creditors.

According to Office of the High Commissioner for Human Rights, Attiya Waris, the UN Independent Expert on foreign debt and human rights, highlighted the bill’s significance in providing a clear framework for debt restructuring. The initiative seeks to prevent prolonged economic isolation for defaulting nations, often resulting from the lengthy and complicated process of renegotiating terms with bondholders.

The bill, born from the merger of two similar legislative proposals earlier this month, is designed to regulate debt claims against eligible debtor states. It emphasizes equitable burden-sharing among creditors and aims to cap recoveries for private sector creditors to levels comparable to those the United States Federal Government would receive as a creditor.

Waris underlined the bill’s importance, noting its foundation on the recognition of the profound human rights implications of economic crises, including the impact of debt distress and disorderly defaults. The expert has previously called for international cooperation on debt relief, specifically urging New York State authorities to pass legislation that supports debt relief initiatives for developing countries.