DOI: 10.1111/1467-8675.12293 ORIGINAL ARTICLE What creditors owe Anahí Wiedenbrüg London School of Economics and Politics, London, UK Correspondence Anahí Wiedenbrüg, London School of Economics and Politics, London, UK. Email: anahiwiedenbrug@hotmail.com 1 INTRODUCTION Sovereign debt crises are a recurrent phenomenon in the global financial economy (Reinhart & Rogoff, 2009). In the last years in particular, they have occupied center stage in the spectacle that the global financial economy has become. First, the eruption of a sovereign debt crises at the heart of the EU made it apparent that sovereign debt crises are not—and never have been—a exclusive problem of emerging economies in the Global South. Second, in what the Financial Times has come to call “the Argentine debt saga” a related battle is being fought that cannot be described better than as “a striking performance or display”—the dictionary definition of spectacle. Under the auspices of “vulture-fund” manager Paul Singer, the struggle in New York Court rooms is one over who is to carry how much of the burdens resulting from the accumulation of unsustainable sovereign debt. 1 This question has obvious distributive implications. These distributive implications are, however, hardly ever thema- tized. The underlying concern in the dominant, academic, and policy-making debate is not how much of the burden of restructuring should debtors and individual creditors, respectively, shoulder, as a matter of justice, but how much of the burdens of restructuring they can carry to keep the international financial system from collapsing. There is, moreover, a sequential ordering in the logic adopted, that shifts much of the burden onto debtor states: A debtor state must pay its debts up until the point in which the continued servicing of its loans would undermine the country's future capacity to pay. Only the fraction of the debts that are needed to get a country back to these debt-sustainability levels are restruc- tured. The primary concern, therefore, is to maximize the repayment of outstanding debt and the implicit normative assumption is that the debtor must pay. In this article, I seek to turn the tables of the debate surrounding debt restructuring, starting not with the question of how much of the burdens of debt crises creditors can be made to carry, but how much they ought to carry. I question the assumption underlying most contemporary public, academic, and policy debate that moral reasons to shoulder burdens of adjustment reside in the sovereign debtor alone, and that whatever haircut creditors accept springs only from the pragmatic necessity of restoring debt sustainability. 2 More concretely, the question I answer is on what grounds, if any, are creditors responsible for carrying part of the burden of restructuring unsustainable levels of sovereign debt. Since the sheer variety of types and number of cred- itors makes speaking “of creditors as a single group in sovereign lending … not only historically problematic but also theoretically untenable” (Lienau, 2014, p. 34), in this article I chose to focus on institutional creditors. Institutional creditors are “the big guys on the block—the elephants. They are the pension funds, mutual funds, money managers, insurance companies, investment banks, commercial trusts, endowment funds, hedge funds, and some hedge funds investors” (Investopedia). I also take institutional investors to include public multilateral creditors (such as the World Bank and the International Monetary Fund, IMF) and public bilateral creditors (other states). Non-institutional or retail Constellations. 2018;25:101–116. wileyonlinelibrary.com/journal/cons c  2017 John Wiley & Sons Ltd. 101