The principle of comparability of treatment (CoT) is a key element of the G20’s Common Framework for debt restructuring. However, in its current form, is not being enforced, does not distribute the burden of debt reduction equally among creditors, and does not guarantee compliance by private creditors, except for “light” restructurings. The note proposes two main reforms to address this challenge: (i) carrying out coordinated and simultaneous negotiations across creditors and (ii) using NPV reduction based upon a common discount rate as the only measure of CoT.
Details
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Author
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Document Date
2022/02/21
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Document Type
Report
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Report Number
168876
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2022/02/22
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Disclosure Status
Disclosed
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Doc Name
Achieving Comparability of Treatment under the G20’s Common Framework
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Keywords
Equitable Growth, Finance & Institutions; private creditor; discount rate; debt service; commercial creditor; change in debt service; debt relief; trade and investment; debt due; original debt; commercial debt; financial market participant; private sector creditor; old debt; International Debt Statistics; debt restructuring; interest rate reductions; maturity extension
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Citation
Rivetti,Diego
Achieving Comparability of Treatment under the G20’s Common Framework (English). Equitable Growth, Finance and Institutions Notes Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/426641645456786855/Achieving-Comparability-of-Treatment-under-the-G20-s-Common-Framework