07 June 2012

Euro area sovereign debt crisis leads IIF to announce top-level group to strengthen crisis prevention and resolution practices

The Institute of International Finance announces the formation of a special Joint Committee on the Strengthening of the Framework for Sovereign Debt Crisis Prevention and Resolution, under the auspices of the Group of Trustees of the Principles for Stable Capital Flows and Fair Debt Restructuring.

Senior officials from finance ministries, central banks and multilateral institutions, are joining with leaders of private finance to address core issues of sovereign debt management. “We need to learn the lessons of the Greek crisis and the broader euro area sovereign debt crises to contribute to important improvements in crisis management. The goal of the committee is to develop concrete proposals to enhance crisis prevention and resolution practices”, said IIF Managing Director, Charles Dallara.

Each of the participants in the new committee has extensive experience in managing sovereign debt issues. The Co-Chairmen of the committee are: Mr Jean Lemierre, Senior Advisor to the Chairman, BNP Paribas, who together with Mr Dallara co-chaired the steering committee representing private creditors and investors to Greece; Ambassador David Mulford, Vice Chairman International, Credit Suisse Group, and Undersecretary of the US Treasury at the time when the “Brady Plan” was formulated to resolve the Latin American debt crisis; Mr Thomas Wieser, Chairman of the European Union’s Economic and Financial Committee, and President of the Eurogroup Working Group; Mr Gerardo Rodríguez Regordosa, Undersecretary of Finance and Public Credit, Government of Mexico.

The new committee is being established under the auspices of the Group of Trustees of the Principles for Stable Capital Flows and Fair Debt Restructuring. Bank of France Governor and Co-Chair of the Group of Trustees, Christian Noyer, said “On behalf of my Co-Chairs, I welcome the formation of the Joint Committee. The Principles provide a framework for the new committee’s deliberations as they emphasise the importance of crisis prevention and of the need for good faith voluntary negotiations in the event that a sovereign debt restructuring becomes unavoidable.”

The four Co-Chairs of the Joint Committee stated: “We are honoured to chair a committee of such distinguished and experienced practitioners from both the public and private sectors. We will deliberate and draw lessons from recent episodes of sovereign debt crises both in Europe and elsewhere. We will discuss measures to strengthen the guidelines provided by the Principles to keep them relevant and useful to address today’s challenges in sovereign crisis prevention and resolution.”

Press release

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