Washington, D.C., October 12, 2016 - Statement by the Co-chairmen on behalf of the Group of Trustees:
- Dr. Zhou Xiaochuan, Governor, People's Bank of China
- Mr. Christian Noyer, Honorary Governor, Banque de France
- Dr. Axel Weber, Chairman of the Board of Directors, UBS Group AG
Members of the Group of Trustees of the Principles for Stable Capital Flows and Fair DebtRestructuring meet once a year to review the progress being made on the implementation of' the Principles within the framework of the international financial architecture.
The Trustees discussed the comprehensive 2016 Report on the Implementation of the Principles provided to them by the Principles Consultative Group (PCG) , which includes senior' officials from emerging and mature market economies as well as senior bankers and investors.The Trustees noted with satisfaction that the voluntary, market-based, flexible guidelines for' debtor-creditor dialogue underlying the Principles continue to serve as a relevant and effective framework for both crisis prevention and resolution, while facilitating stable capital flows,' support for financial stability and sustained growth. The Principles promote crisis prevention through the pursuit of strong policies, data and policy transparency, and open communication' and dialogue between creditors and investors, and effective crisis resolution through inter alia good-faith negotiations for a fair debt restructuring deal with representative groups of' creditors. They also underscored the importance of enhanced investor relations and data transparency practices and expressed appreciation for the IIF's annual evaluation of these' practices by emerging market sovereign bond issuers.
The Trustees noted the PCG's review of the evolving discussions on the effective framework for sovereign debt restructuring. They encouraged the IIF Secretariat, the PCG and the IIF' Committee on Sovereign Risk Management to continue advocating for accelerated adoption of the aggregated collective action clauses (CACs) in the outstanding stock of bonds and for' greater inclusion of the revised creditor engagement clause in the uptake of the enhanced contractual provisions in sovereign bond contracts, as recommended by the International' Capital Market Association (ICMA) and the IIF. The Trustees noted the G20 commitment to further analyze the technicalities, opportunities and challenges of state-contingent GDP bonds' and encouraged public authorities to make progress on this issue. The Trustees also welcomed the continued discussions between private and public creditors aiming at strengthening' coordination between the two.
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The Institute of International Finance is the global association of the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks.