Argentina touts G20 initiative to curb vulture funds

Argentina Monday spotlighted a global initiative to limit the power of so-called vulture funds to disrupt the finances of sovereign nations, local media reported.

Speaking to reporters on the second day of the G20 Summit in Turkey, Argentina's Economy Minister Axel Kicillof said the international forum supported the need to better regulate the existing financial structure.

According to Kicillof, the G20 will issue a final declaration containing a call to rein in vulture funds, or hedge funds, which buy overdue national debt in secondary markets at discounted prices, but have legal resource to sue governments for the full amount at their convenience, thus influence the financial stability especially in developing countries.

"The final communique is very good," the state news agency Telam quoted Kicillof as saying. "It contains an entire paragraph dedicated to the issue of vulture funds and debt, showing the need to find ways to protect countries from the attacks of the vulture funds."

"We need clear rules in the new international financial structure, a new legal framework with sound and transparent principles," Kicillof added.

He however warned that the problem will continue to plague countries with outstanding debts.

Still, he welcomed "the changes in the contractual clauses," saying "the strengthening of clauses on collective action were important steps."

Argentina recently lost its protracted legal battle in U.S. courts against U.S. vulture funds holding overdue national debt, after a New York court ruled in favor of the debt holders, and ordered the government to pay up.

"We can't accept the rule to let any private company enjoy better debt restructuring terms than a sovereign nation," said Kicillof. Endi