WASHINGTON: US Treasury Secretary Janet Yellen said on Tuesday there remains “considerable room for improvement” in the global debt restructuring process, as world leaders convene in Washington this week for key meetings.
Her comments come as central bankers, finance ministers and other participants gather for the International Monetary Fund and World Bank’s spring meetings, where debt restructuring is among important topics on the agenda.
As global growth slows, the World Bank has warned that the outlook is especially tough for the poorest economies, which grapple with sluggish growth driven by heavy debt burdens and weak investment.
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“There is considerable room for improvement in the international debt restructuring process,” Yellen said in prepared remarks to a press briefing.
She earlier said China should move more quickly on some debt restructurings, though she told AFP in an interview last week that Beijing’s efforts in Sri Lanka’s case was a “hopeful sign.”
On Tuesday, Yellen noted that ministers from both creditor and debtor countries, as well as representatives of private creditors, will convene for a global sovereign debt roundtable.
“I look forward to a robust discussion on improvements to the Common Framework process for low-income countries and the debt treatment process more broadly,” she said.
This week, a senior Treasury official told reporters that the US is looking to “concrete steps” that will help the restructuring process run “faster and in a more transparent way.”
In her remarks Tuesday, Yellen also said the United States remains “vigilant” in the face of risks to the economy, as countries continue tackling fallout from Russia’s invasion of Ukraine while pushing ahead with their pandemic recovery.
“In some countries, including the United States, there have been recent pressures on our banking systems,” she added.
“I’ve been in close communication with my counterparts over the past few weeks on these developments and I look forward to continuing that dialogue this week,” she said.
But Yellen stressed that the US banking system remains sound, and that the global financial system is resilient due to reforms that nations took after the 2008 financial crisis.