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October 22, 2020

Washington, DC: Against the backdrop of the unprecedented impact of the COVID-19 pandemic on global debt markets, capital flows and debt sustainability—particularly for vulnerable low-income countries—the members of the Group of Trustees of the Principles for Stable Capital Flows and Fair Debt Restructuring met virtually this week for their annual review of progress on the implementation of the Principles within the framework of the international financial architecture. 

Following the meeting, co-Chairs François Villeroy de Galhau, Governor, Banque de France; Dr. Axel Weber, Chairman of the Board of Directors, UBS Group AG; and Dr. Yi Gang, Governor, People's Bank of China issued the following statement:

“Addressing the economic consequences of the COVID-19 pandemic continues to be a challenge. While there has been some improvement in international funding conditions in recent months, market access is still constrained for many vulnerable countries, and there is no visible end to the crisis on the horizon.

“Amid these uncertainties, one thing remains clear—public and private sector cooperation through forums such as the Group of Trustees are key to shaping a coordinated and effective global response. We urge continued dialogue with all stakeholders, including both official and private creditors as well as borrowing countries, in line with the recommendations of the Principles.”

In this context, the group welcomed the six-month extension of the G20 Debt Service Suspension Initiative (DSSI), which will help eligible low-income countries address urgent liquidity challenges. The Trustees noted that while very few eligible countries have asked the private sector for debt service suspension under the DSSI, the private sector will continue to work to support the initiative. These efforts include extending the Terms of Reference and other tools to facilitate private creditor support. Furthermore, the Trustees recognized the importance of the official sector work underway on the proposed “Common Framework” for debt treatments beyond the DSSI, and urged further consultation with all stakeholders.

With regard to the Voluntary Principles for Debt Transparency, the Trustees welcomed the progress made to identify and fund a data repository, building on the proposal from the OECD to host the repository. The Trustees look forward to further updates including on the commencement of operations of the data repository and the implementation of the Voluntary Principles for Debt Transparency, which will start no later than one year from the formal identification of the repository.

Finally, the Trustees discussed the 2020 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, investors and sovereign debt experts.

Noting the recent debt restructurings in Argentina and Ecuador, and the role of collective action clauses (CACs) in those negotiations, the Trustees welcome the ongoing review of the 2014 ICMA CACs by industry practitioners and look forward to the resulting recommendations.

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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 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.