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World Bank calls on governments to change sovereign debt laws

The World Bank has increased its calls for changes in sovereign debt laws so governments have more control when crises strike and they have to restructure their debt. In a blog, Indermit Gill, the Bank's vice president for equitable growth, finance and institutions, and sovereign debt lawyer Lee Buchheit, said that as global growth fizzles and interest rates surge, the risk of a spate of debt crises is rising - and yet the available mechanisms for tackling them are deeply inadequate. They outlined four key changes that would improve the effectiveness of the so-called Common Framework debt relief plan the Group of Twenty (G20) rich nations launched at the height of Covid-19 pandemic. They said that governments have a compelling public interest to adopt legislation to end the imbalance and consider it a long-overdue step to protect their own taxpayers.

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