Kilpi, Jukka2019-09-252019-09-252013-01-042012http://hdl.handle.net/20.500.12424/188713The aim of this paper is to establish whether states are bound by a moral obligation to pay their debts and how sovereign insolvencies should be treated. The state is a contractually based secondary moral agent which has supreme powers. Many states have gone bust but there are no laws governing the bankruptcy process for them. The state’s existence has intrinsic value. It is more important to safeguard an insolvent state than it is to collect its debts. This is the principle of the ethics of state bankruptcy. At the same time debt is a moral relationship between the debtor and the creditor, and the state has moral obligations as a borrower. Without moral flavour there is little trust, and without trust bonds are vague and credit yields shoot up. Ethics speaks for bankruptcy institutions that have power to discharge sovereign debts in an organised manner.engWith permission of the license/copyright holderEthics, state, sovereign, bankruptcy, insolvency, credit, debt, bond, contract, promise, moral agent, trustEconomic ethicsBusiness ethicsTrade ethicsConference proceedings