Latest news with #debttransparency
Finextra
12 hours ago
- Business
- Finextra
World Bank calls for "radical" restructuring of national debt reporting in new report
The World Bank released a report outlining how countries should redefine how they disclose debt due to more complexity in the current financing environment. 0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. The Radical Debt Transparency report found that private placements, central bank swaps, and collaterised transactions have complicated the reporting process. As a result, while the proportion of low-income countries publishing debt data has increased from under 60% to over 75% since 2020, only 25% have reported loan-level data on newly contracted debt. The report also found that domestically-issued debt is on the rise, but disclosures are not accurate. Furthermore, countries are also using confident debt restructurings with certain creditors which withholds essential data. World Bank's senior managing director Axel van Trotsenburg stated: 'Recent cases of unreported debt have highlighted the vicious cycle that a lack of transparency can set off. When hidden debt surfaces, financing dries up and terms worsen. Countries turn to opaque, collateralized deals. Radical debt transparency, which makes timely and reliable information accessible, is fundamental to break the cycle.' The report urges debtor and creditor countries to reform their transparency practices and issue mandates to ensure transparency in loan contracts and disclosures of lending terms. The report also suggests that there should be more frequent audits and better national oversight, published debt restructuring terms, and full participation from creditors in debt reconciliation processes. The World Bank is currently working to expand their global Debtor Reporting System to ensure that quality data is being shared and utilised. Pablo Saavedra, the World Bank's vice president for prosperity, commented: 'Debt transparency is not just a technical issue—it's a strategic public policy that that builds trust, reduces borrowing costs, and attracts investment. Radical debt transparency not only supports debt sustainability but also unlocks private sector investment to drive job creation.'
Yahoo
a day ago
- Business
- Yahoo
World Bank urges 'radical' debt transparency for developing countries
By Libby George LONDON (Reuters) -The World Bank is urging "radical" debt transparency for developing countries and their lenders to stave off future crises, it said in a report released on Friday. The Bank wants to broaden the depth and detail of what sovereign countries disclose regarding new loans, as more of them enter complex, off-budget borrowing deals due to global market turmoil. "When hidden debt surfaces, financing dries up and terms worsen," World Bank senior managing director Axel van Trotsenburg said in a statement, adding: "Radical debt transparency, which makes timely and reliable information accessible, is fundamental to break the cycle." The Bank wants countries to make legal and regulatory reforms that mandate transparency when signing new loan contracts and to share more granular debt data. It also wants more regular audits, the public release of debt restructuring terms, and for creditors to open their loan and guarantee books. It is calling for better tools for international financial institutions to detect misreporting. The World Bank and other multilateral banks have been pressing for years to improve lending transparency. The proportion of low-income countries reporting some debt data is now above 75%, up from below 60% in 2020. But only 25% of them disclose loan-level information. As financing costs spike due to trade wars and geopolitical risk, more countries are using arrangements such as central bank swaps and collateralized transactions that complicate reporting. Senegal has used private debt placements as it negotiates with the International Monetary Fund over misreporting of its previous debts, and Cameroon and Gabon have also used what are known as "off-screen" deals. Angola recently had to pay a $200-million margin call after a rout in its bond prices. In Nigeria, the central bank disclosed in early 2023 that billions of U.S. dollars of its foreign exchange reserves were tied up in complex financial contracts negotiated by the previous leadership. The Bank said broader loan coverage and deeper loan-by-loan disclosures would enable the international community to fully assess public debt exposure. (Reporting By Libby GeorgeEditing by Rod Nickel) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
a day ago
- Business
- Reuters
World Bank urges 'radical' debt transparency for developing countries
LONDON, June 20 (Reuters) - The World Bank is urging "radical" debt transparency for developing countries and their lenders to stave off future crises, it said in a report released on Friday. The Bank wants to broaden the depth and detail of what sovereign countries disclose regarding new loans, as more of them enter complex, off-budget borrowing deals due to global market turmoil. "When hidden debt surfaces, financing dries up and terms worsen," World Bank senior managing director Axel van Trotsenburg said in a statement, adding: "Radical debt transparency, which makes timely and reliable information accessible, is fundamental to break the cycle." The Bank wants countries to make legal and regulatory reforms that mandate transparency when signing new loan contracts and to share more granular debt data. It also wants more regular audits, the public release of debt restructuring terms, and for creditors to open their loan and guarantee books. It is calling for better tools for international financial institutions to detect misreporting. The World Bank and other multilateral banks have been pressing for years to improve lending transparency. The proportion of low-income countries reporting some debt data is now above 75%, up from below 60% in 2020. But only 25% of them disclose loan-level information. As financing costs spike due to trade wars and geopolitical risk, more countries are using arrangements such as central bank swaps and collateralized transactions that complicate reporting. Senegal has used private debt placements as it negotiates with the International Monetary Fund over misreporting of its previous debts, and Cameroon and Gabon have also used what are known as "off-screen" deals. Angola recently had to pay a $200-million margin call after a rout in its bond prices. In Nigeria, the central bank disclosed in early 2023 that billions of U.S. dollars of its foreign exchange reserves were tied up in complex financial contracts negotiated by the previous leadership. The Bank said broader loan coverage and deeper loan-by-loan disclosures would enable the international community to fully assess public debt exposure.
