Meeting of the Group of Trustees of the Principles

October 13, 2018
Bali, Indonesia, October 13, 2018 -

Statement by the Co-chairmen on behalf of the Group of Trustees:'  '  '
'  '  Dr. Yi Gang, Governor, People's Bank of China'  '  '
'  '  Mr. Francois Villeroy de Galhau, 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 Debt Restructuring 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 noted the uncertain global economic environment with significant downside risks for capital flows to emerging markets. Trade-related tensions have acted as a headwind for FDI flows across many emerging markets, while flows more broadly have been dampened by factors including diminishing global central bank liquidity, higher U.S. borrowing costs, a stronger U.S. dollar, concern about rising debt levels, geopolitical tensions and idiosyncratic risks in various EM countries.'  The Trustees noted that in this environment the Principles'ˆ’and the underlying voluntary market-based, flexible guidelines for the behavior of sovereign debtors and private creditors'ˆ’continue to serve as a valuable framework for promoting and maintaining stable capital flows and supporting financial stability.

The Trustees discussed the comprehensive 2018 Report on the Implementation of the Principles presented 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. They noted with concern the rapid rise in debt levels in EM and developing economies'ˆ’particularly in the corporate sector and in hard-currency borrowing'ˆ’which in some cases could impact macroeconomic growth prospects and financial stability. Debt vulnerabilities in some countries have been compounded by a lack of debt transparency.

The Trustees were briefed on the details of the private sector Debt Transparency Initiative currently being developed in consultation with the public sector.'  This initiative is focused on finding ways to improve disclosure and transparency in sovereign debt markets. Greater transparency has many benefits including improved credit assessment and decision making by lenders, better debt management by EM borrowers (including better access to funding and lower borrowing costs), and support for debt sustainability. Towards this end, the recently formed IIF Debt Transparency Working Group (DTWG) is developing a voluntary set of principles to promote transparency in sovereign debt markets.

The Trustees noted that this private sector initiative on debt transparency aims at complementing recent official sector efforts to support both transparency and debt sustainability, as articulated in the 2017 G20 Operational Guidelines for Sustainable Financing. They agreed that securing participation of a wide range of private lenders and borrowers should be an important part of the initiative. The Trustees would welcome and encourage further progress towards its fruition.


The Institute of International Finance is the global association of the financial industry, with close to 450 members from more than 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


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