In the wake of the extension of the G20 Debt Service Suspension Initiative (DSSI), as well as recent thoughtful proposals for reforming the international sovereign debt architecture, the IIF offers these private sector perspectives that build on our September 22 letter to the G20.

Building on the quarterly conference calls of the Principles Consultative Group, the 2020 PCG report takes stock of the impact of the Covid-19 crisis on the global sovereign debt markets, emerging markets capital flows and debt sustainability, especially in developing countries. 

We remain strongly supportive of the intent behind the DSSI. However, we also recognize that the underlying premise may have changed—the issues in some countries are no longer temporary liquidity problems, but rather more fundamental solvency concerns. This letter sets out three key points which we believe are crucial.

Informed by our working group discussions, this letter is meant to frame the accompanying Terms of Reference for private sector consideration of borrower requests within the DSSI.

The Terms of Reference are a toolkit for DSSI-eligible sovereign borrowers that request forbearance from their private creditors. This new framework offers a flexible template for in-scope borrowers and their private creditors to advance conversations and enable voluntary debt service suspension, on terms in line with official bilateral creditors.

In response to the G20 Debt Service Suspension Initiative (DSSI) and calls in the IMFC, Development Committee and Paris Club communiqués for private sector participation, this letter provides an update on IIF activities, shares views from the international financial community, and outlines thoughts on a potential approach to voluntary private sector participation in the DSSI.

On behalf of the IIF membership—over 450 global firms across the financial services industry—President and CEO Tim Adams expresses our grave concern about the threat to debt sustainability posed by the COVID-19 pandemic. 
 

The 2019 Report on the Implementation of the Principles takes stock of the quarterly discussions of the Principles Consultative Group (PCG), which includes senior officials from emerging and mature market economies as well as senior bankers, investors and sovereign debt experts.

The Principles for Stable Capital Flows and Fair Debt Restructuring incorporate voluntary, market-based, flexible guidelines for the behavior of sover