Creditors’ Perspective

Private sector creditors need to answer to their own investor constituencies. They expect to understand the financial rationale for debt relief. The CF does not adequately address asymmetry of information

» Debtor governments need to engage in good faith efforts to disclose timely and accurate information to all creditors, with information asymmetries between official and private creditors being minimised

• A complex situation given regulatory and legal requirements imposed on market participants. However, the definition of data to be shared should be clear and time bound

» The responsibility is on the debtor government to post the required data on an information-sharing platform

» Seeking to maximise debt relief by squeezing creditor constituencies is contra-productive and leads to standoffs that harm the potential future economic prospects of a debtor country, and ultimately the most vulnerable

» Seeking to create financial buffers through excess debt relief not only creates a sense of distrust among creditors, but may increase legal risk for the debtor government, often at great expense at a time when financial resources are scarce and should not be wasted