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: Credit Slips

Rx Contract Abrogation (Use Only As Directed)

By Adam Levitin

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Former Credit Slips guest blogger Anna Gelpern has a nice post on AIG and contract abrogation on Nouriel Roubini's RGE Monitor.  Anna argues that there are times when abrogating contracts makes sense, but that AIG just isn't one of them.  Contract abrogation is a powerful tool that should be used sparingly and only to protect macroeconomic welfare, not to express political outrage over the behavior of a single company.  

Full post as published by Credit Slips on March 18, 2009 (boomark / email).

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