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Charles N. Brower and Alexandra Goetz-Charlier

Global stability is a key objective of the global financial system. Against this background, disputes between international private creditors and States arising during currency and sovereign debt crises are increasingly resolved through ISDS. This chapter investigates the relationship, both complementary and conflictual, between international investment law and the global financial system. The financial literature tells us that it would be simplistic, if not erroneous, to view financial crises through the measure of default versus non-default. Empirical studies evidence that, over the course of a crisis, States may not be cooperative with creditors, or even with the institutions of the global financial system, at the risk of jeopardising global stability. Thus, ISDS complements the global financial system by providing private international creditors with a judicial forum for the resolution of such disputes. On the other hand, ISDS has, on multiple occasions, interfered with this system which greatly influenced contemporary treaty practice. Keywords: global financial system, international investment arbitration, IMF, sovereign debt, State’s coercive behaviours; financial crisis