Washington DC - Behind closed doors, International Monetary Fund (IMF) Executive Board Members are reacting to solutions prepared by IMF staff aimed at preventing global and regional financial crises. Part of the focus stems from G20 concern over extreme predatory behavior on global finance and the precedent set in the related pending Supreme Court case of Argentina vs NML Capital.
“We understand that in initial conversations, solutions are sought to limit or eliminate extreme predatory and hold-out behavior that violate global debt relief policies, debt restructuring and sound operation of the financial system,” stated a letter sent to IMF officials from Jubilee USA Network and New Rules for Global Finance. “We welcome your efforts on these extreme issues and your further discussions of supporting solutions to international financial crises.“
Last year the G20 asked the IMF to address the global debt crisis and speculative investment, which spurred the global financial crisis of 2008. The IMF’s major annual report this spring focused on inequality and explains how debt and debt related restructuring processes propel inequality and financial crisis.
New Rules and Jubilee USA’s letter continued, “…we strongly encourage you and your peers on the Board to debate how international debt restructuring can be independent, comprehensive, transparent, predictable, accountable and arbitrated neutrally.”
In hopes of preventing another financial crisis, IMF staff have prepared some proposals on more orderly and predictable debt restructuring. Similar proposals are in process or have been proposed by The United Nations Conference on Trade and Development, the Brookings Institution and the Center for International Governance Innovation.
According to the World Bank, the global financial crisis propelled more than 90 million people into extreme poverty.
“The financial crisis most hurt the people who had nothing to do with causing it,” shared Eric LeCompte, the executive director of the religious financial reform campaign, Jubilee USA Network. “We all need to consider how the poorest people suffer from our inability to create a more predictable and comprehensive process.”
Jubilee USA Network is an alliance of more than 75 US organizations, 400 faith communities and 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people.