Diaspora Bonds: Patriotism or Proft?


G. Mitu Gulati

Date of Event



Event Description

In the world of sovereign debt instruments, the Holy Grail of financial instruments is the GDP indexed bond. That is, a borrowing instrument that operates counter cyclically. The sovereign would make smaller payments to lenders when times were tough and higher ones during good times. If such products were to be widespread, the risk of sovereign financial crises would be ameliorated. However, years of research have so far yielded little success. The Israeli diaspora bonds program–while not fitting the conventional conception of a GDP indexed bond–might well have found the magic elixir. Spreads between Israeli diaspora bonds and conventional bonds suggest a countercyclical payment pattern. The Israeli program may be sui generis. But it also possible that its design contains clues as to how to design a successful countercyclical sovereign financing program.

Speaker Bio

Mitu Gulati’s work focuses on sovereign debt restructuring and contracts, and explores how to help countries in financial distress. Gulati joined the UVA Law faculty in 2021. He was previously on the faculty of Duke Law School since 2004, and has also served on the faculties of UCLA Law School and the Georgetown University Law Center. Gulati co-hosts the podcast “Clauses and Controversies,” is a contributor to the blog Creditslips.org and serves as regional editor for the journal Capital Markets Law Journal.

Gulati has won no awards, prizes or other distinctions. That is, with the exception of a second place finish in the fancy dress competition in third grade in India.

Lecture Series

Center for Business Law & Regulation

Subject Headings

sovereign debt instruments; GDP indexed bond


Law School Moot Courtroom (A59)

Document Type