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Debt Restructuring Mechanism

Volume 404: debated on Thursday 8 May 2003

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To ask the Chancellor of the Exchequer if he will make a statement on progress at the Spring Meeting of the IMF on the introduction of the legal framework of the sovereign debt restructuring mechanism. [110038]

At the Spring Meeting of the International Monetary and Financial Committee (IMFC) on 12 April, ministers discussed the report of the Managing Director of the International Monetary Fund on a Statutory Sovereign Debt Restructuring Mechanism. The conclusion of that discussion is set out in the IMFC communique released on 12 April as:

"The Committee welcomes the work of the IMF in developing a concrete proposal for a statutory sovereign debt restructuring mechanism (SDRM) and expresses its appreciation for the IMF management and staffs efforts. The extensive analysis and consultation undertaken in developing the proposal have served to promote better understanding of the issues to be addressed in bringing about orderly resolution of crises. The Managing Director's report sets out the current position. The Committee, while recognizing that it is not feasible now to move forward to establish the SDRM, agrees that work should continue on issues raised in its development that are of general relevance to the orderly resolution of financial crises. These issues include inter-creditor equity considerations, enhancing transparency and disclosure, and aggregation issues. The IMF will report on progress at the Committee's next meeting."