The IIF's work on debt policy falls into several buckets:
In response to strong demand from our members and a range of private/public sector collaborators to support efforts to promote better disclosure in sovereign debt markets, the IIF has launched a Debt Transparency Initiative tasked with creating and implementing a set of voluntary Principles for Debt Transparency—applicable universally but especially in emerging and developing countries, an idea consistent with the G20-endorsed Principles for Stable Capital Flows and Fair Debt Restructuring.
The primary mandate of the Debt Transparency Initiative is to find ways to improve disclosure and make comprehensive debt data more accessible. 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. The G20 has expressed support for IIF’s work on the Voluntary Principles for Debt Transparency in the Communiqué of the Finance Ministers and Central Bank Governors Meeting in Fukuoka in June 8-9, 2019. In the next year, the DTWG will be working on operationalizing the Voluntary Debt Transparency Principles, including finding an appropriate data repository to house the disclosed information.
Group of Trustees of the Principles for Stable Capital Flows and Fair Debt Restructuring
The Principles were conceived in the aftermath of the sovereign debt crises in Asia, Russia and Latin America. They constitute a voluntary code of conduct between sovereign debt issuers and their private sector creditors that was agreed in 2004 and endorsed by the G20 Ministerial Meeting in Berlin that same year. The Principles incorporate voluntary, market based, flexible guidelines for the behavior of sovereign debtors and private creditors to promote and maintain stable capital flows as well as support financial stability and sustainable growth.
The Group of Trustees is the guardian of the Principles for Stable Capital Flows and Fair Debt Restructuring and it oversees the work of the Principles Consultative Group (PCG). It consists of current and former leaders in global finance with exceptional experience and credibility. The Group currently has three co-chairs: Governor François Villeroy de Galhau of the Banque de France; Dr. Axel Weber, Chairman of UBS AG and former President of the Bundesbank; and Governor Yi Gang of the People’s Bank of China.
The Group of Trustees meets once a year to review progress on implementation of the Principles within the framework of the international financial architecture and to review the implementation of the Principles as provided for in the Annual Report on the Implementation of the Principles. The Group’s mandate includes:
- Reviewing the evolution of the international financial system as it relates to emerging markets and other major debtor countries;
- Reviewing the development of the Principles, including their implementation; and
- Making proposals for modification of the Principles, if needed.
Principles Consultative Group
The Principles Consultative Group is tasked with monitoring and encouraging the practical application of the Principles for Stable Capital Flows and Fair Debt Restructuring. The group’s membership includes finance ministry and central bank officials as well as senior representatives of the private financial community. Many of the PCG’s members were instrumental in the formulation of the Principles. Regular PCG conference calls provide an opportunity to discuss implementation issues, country cases, and implications of developments in global capital markets. The PCG welcomes a number of regular observers, including representatives of the IMF and World Bank/IFC staff, the IADB, the EBRD, the BIS, the ECB and the Federal Reserve Bank of New York.
The Institute’s deep involvement with investor relations and data transparency issues dates back to the mid-1990s. Through this work, the IIF has developed a set of 20 criteria for the evaluation of investor relations (IR) practices and a set of 23 criteria for the evaluation of the data dissemination practices of emerging market sovereign debt issuers. The IIF’s recommendations for enhancing IR practices have been formulated into a set of Best Practices issued in 2005. The results of the IIF’s annual evaluation of IR and data dissemination practices of key emerging market (EM) countries are published annually and since 2009, included in the annual Report on Implementation by the Principles Consultative Group.