The Principles for Stable Capital Flows and Fair Debt Restructuring incorporate voluntary, market-based, flexible guidelines for the behavior of sovereign debtors and private creditors with the aim of promoting and maintaining stable capital flows, financial stability and sustainable growth. The Principles promote crisis prevention through the pursuit of strong policies, data and policy transparency, and open communication and dialogue with creditors and investors -particularly through investor relations programs (IRPs). The Principles strive for effective crisis resolution through, inter alia, good-faith negotiations with representative groups of creditors and non-discriminatory treatment of all creditors. The Principles are monitored by two oversight bodies-the Group of Trustees and the Principles Consultative Group (PCG), which includes senior officials from developed and emerging-market countries, as well as senior bankers and investors.
Since the Principles were launched in 2004, their effective implementation has helped safeguard access to private external financing during periods of global financial stress. Countries that have employed the combination of good policies, good communication and disclosure practices-especially through active IRPs-have been able to maintain investor confidence and have performed better relative to others, both during the 2008-09 global financial crisis and since then.
In view of evolving trends in global financial and sovereign debt markets, the PCG has continued to have extensive discussions on strengthening the framework for sovereign debt markets. The discussions have covered the role of debt transparency in sovereign debt markets as well as efforts to strengthen coordination between public and private sector creditors on this issue. The PCG was updated on developments in the recent sovereign debt restructuring processes in Mozambique, Chad and Congo. The group also closely followed the recent debt default in Barbados, as well as the developing sovereign debt crisis in Venezuela.'