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Vulture funds

Volume 467: debated on Tuesday 13 November 2007

To ask the Chancellor of the Exchequer if he will bring forward proposals to prevent vulture funds operating in the UK; and if he will make a statement. (162958)

The Government are working to address the problem of so-called ‘vulture funds’ in two ways—by preventing debts being sold to vulture funds in the first place and by limiting the damage done by cases already under way. To reduce the risk of debts falling into the hands of vulture funds, we are working with the World Bank to help poor countries buy back their commercial debts at a deep discount at the earliest possible opportunity through its Debt Reduction Facility. We are also working with Heavily Indebted Poor Countries (HIPCs) to strengthen their debt management capacity and overall governance.

To address cases where poor countries’ debts are already in the hands of vulture funds, we are working with the African Development Bank to develop proposals for a Legal Assistance Facility to help ensure that countries have access to legal advice to help them fight these cases.

The UK will also continue to raise this issue internationally. At the recent Annual Meetings of the World Bank and International Monetary Fund, G7 Finance Ministers agreed to examine whether additional steps can be taken to address this problem.