The United Nations voted Friday to begin negotiations on a legal framework for sovereign debt restructuring with a view to clamping down on "vulture funds" at the center of Argentina's July debt default.
The General Assembly's committee on economic and financial matters voted by 128 to 16 to set up a new body to create, over the next nine months, new international standards to govern debt restructuring.
The measure follows on a non-binding resolution adopted in September that called on the United Nations to set up the framework to improve the global financial system.
The United States, Japan, Australia and much of the European Union voted against the measure, arguing that the International Monetary Fund or the Paris Club of creditors was the best forum for such negotiations.
Two hedge funds, which Argentina labels "vultures," refused to take part in the restructuring of $100 billion in debt the country defaulted on in 2001.
The funds last year won their New York lawsuit against the country demanding full payment on the bonds they held, throwing the Argentina restructuring into uncertainty and forcing the country default again on all of its debt.
The court's decision to give the holdouts full rights on the debt they hold has raised issues for future restructurings when a government defaults on its debt.