The IMF’s April 2024 Policy Reforms and Sovereign Debt Restructuring

In a recent paper published with the Centre for International Governance Innovation, BWC member Randall Henning explores sovereign debt restructuring amid IMF reforms. The Common Framework for Sovereign Debt Restructuring provides a process for easing debt burdens on low-income countries but has operated too slowly for the four countries that have so far sought relief under it. Official bilateral creditors that are not members of the Paris Club are often principally responsible for the pace of the delivery of debt treatments. Under previous policies of the International Monetary Fund, recalcitrant official creditors have been able to slow the provision of financial assistance and extract concessions from other parties to debt restructuring negotiations. Recent changes in those policies are designed to expedite decision making and restrict the use of the approval process in this manner.

Read the full paper here.

All views expressed by members are their own and not reflective of the views of the Bretton Woods Committee.