Ministers stress need for better resolution of debt crises

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Page 129

Following is the text of the communiqué issued by the Group of 10 after its meeting in Washington, DC, on April 21.

The finance ministers and central bank governors of the countries of the Group of 10 met in Washington, DC on April 21, 2002. The meeting was chaired by Didier Reynders, the Minister of Finance of Belgium and the current Chair of the Group of 10.

Ministers and governors took note of reports from Henk Brouwer, Chair of the Deputies of the Group of 10;Mervyn King, Chair of Working Party No. 3 of the OECD [Organization for Economic Cooperation and Development]; and Andrew Crockett, General Manager of the BIS [Bank for International Settlements].

Ministers and governors discussed efforts to strengthen the operation of the international financial system and, in particular, actions that will help prevent, manage, and resolve international financial crises. In that context, they considered the question of debt sustainability and sovereign debt resolution procedures and noted its importance in the context of ongoing work in crisis prevention. They agreed that, going forward, improved assessment of debt sustainability was essential for developing a more rigorous analytic basis for making key judgments. In that context, they noted that assessments of debt sustainability had to be forward- looking and dynamic and needed to take account of factors such as economic policies, public and private sector deficits, interest rates, and economic growth.

They underscored the importance of the credibility and coherence of the underlying economic policies, including the choice of an appropriate exchange regime.

Ministers and governors looked forward to further discussion of these issues in relevant forums.

In discussing debt resolution procedures, ministers and governors reaffirmed the principle...