How do vulture funds make their money?

They buy up the debts of countries in chaos and war, speculating on the fact that when investors finally come back into the country – often encouraged by generous debt writedown schemes and International Monetary Fund programmes – the vultures will get their money back with huge interest on top, benefiting from the fledgling trade and new liquidity.

What's wrong with that?

These desperately poor countries like the Democratic Republic of the Congo, for example, where 100 women a week are dying in childbirth, have better things to do with their money than pay off the vultures. Investors and companies who want to put money into rebuilding the countries, by investing in natural resources – mining, gold, diamonds and cobalt for example – simply stay away. They worry that they will also be targeted by the vultures by getting involved in joint projects with the government. One vulture fund, FG Hemisphere, tried to seize the embassy of the DRC in Washington as payment for the debt.

How big is the problem with these vulture funds?

The World Bank estimates that more than one-third of the countries that have qualified for its debt relief programmes have been targeted with lawsuits by at least 26 vultures. The funds have so far received payouts totalling $1bn.

Why is the Jersey loophole so important?

Many countries have now banned the vulture funds from collecting on the debts through their courts. But a few places, mainly tax havens like Jersey and the British Virgin Islands, still have not closed the loophole. Next month one vulture is hoping for a $100m payout through a court in Jersey. There is still a flock of at least another 22 vultures waiting for a further $1.3bn in payouts.