Panel discussion 1 on specific actions in the first draft of the outcome document on ‘II. F. International financial architecture and systemic issues’

Introductory remarks and moderation

H.E. Ms. Merete Fjeld Brattested, Permanent Representative of Norway to the United Nations

H.E. Mr. Chola Milambo, Permanent Representative of Zambia to the United Nations

Panelists

Ms. Debra-Lee Swanepoel, National Treasury, South Africa

Mr. William Roos, Ministry of the Economy, Finance and Industrial and Digital Sovereignty, France

Ms. Geetu Joshi, Department of Economic Affairs, Ministry of Finance of India

Discussants

Mr. Rémy Rioux, CEO, AFD and President, Finance in Common

Mr. Jose Antonio Ocampo, Professor, Columbia University

Interactive discussion (2-minute time limit)

Background and Guiding Questions

Supporting reform of the international financial architecture (IFA) – the set of international financial frameworks, rules, institutions and markets that safeguard the stability and functions of the global monetary and financial systems – is an explicit mandate of FFD4. Many such reforms have been undertaken since 2020, in response to the series of global shocks and crises. But they have not kept pace with rising needs, changes in the global geopolitical environments and new challenges in the financial system.

The first draft puts forward a set of ambitious proposals for IFA reforms, building on the Pact for the Future. It addresses global governance and contains actions to increase the voice and representation of developing countries in the governance of key institutions at the heart of the global financial safety net — such as the IMF and the World Bank. This is critical to ensuring a fair, transparent, and responsive system that adapts to country-specific needs. To improve crisis prevention, the draft contains actions for a stronger and more efficient global financial safety net, through a stronger role for special drawing rights (SDRs), improvement in IMF facilities and strengthened regional financial arrangements. A well-functioning safety net can enable countries to focus resources on long-term investments needed to achieve the SDGs, rather than on self-insurance or short-term crisis management. Adjustment to financial regulation could also unlock resources by reducing the cost of capital for developing countries, including through recalibrating the pricing of risk, and reducing the mechanistic reliance on credit ratings from private ratings agencies.

Panelists in this session are invited to pay particular attention in their interventions on strengthening the global financial safety net with the IMF at its center and prudential and financial regulation topics. They are invited to address the following questions:

• What should be the main components of a ‘new playbook on SDRs’, which would facilitate more timely decisions on issuance and rechannelling of SDRs, but without requiring changes in SDR rules and the nature and role of SDRs? How can the IMF play a more effective role in the global financial safety net? (actions 47g-j)
• How can we further advance the review of potential miscalibrations in risk-weightings within banking and financial standards? Which fora, bodies, or committees could undertake such a review? (action 49a)
• Regarding credit rating agencies, what can we learn from national experiences in regulation of credit rating agencies and how can they inform the outcome document? (actions 28m, 44a-c, 48a-c)
• How would the annual special high-level meeting under the auspices of ECOSOC for dialogue with credit rating agencies need to be designed to advance relevant actions in the outcome document and be effective and impactful? (actions 48a)

Panel discussion 2 on specific actions in the first draft of the outcome document on ‘II.E. Debt and debt sustainability’

Introductory remarks and moderation

H.E. Ms. Merete Fjeld Brattested, Permanent Representative of Norway to the United Nations

H.E. Mr. Chola Milambo, Permanent Representative of Zambia to the United Nations

Panelists

Mr. Phil Stevens, Foreign, Commonwealth & Development Office, United Kingdom

Ms. Monica Asuna, The National Treasury, Kenya

Mr. Jose Correia, Director General, Economic and Development Cooperation, Cabo Verde

Discussants

Mr. Gianpiero Leoncini, Executive Vice-President, Development Bank of Latin America and the Caribbean

Interactive discussion (2-minute time limit)

Background and Guiding Questions

Amid successive crises and shocks, sovereign debt challenges have become one of the greatest obstacles to realizing sustainable development. Many developing countries face high debt service burdens and borrowing costs, which severely constrain their fiscal space and ability to address poverty and inequality and invest in sustainable development. Despite progress in reforming the debt architecture, restructurings are often still inadequate, late and too lengthy. A development-oriented debt architecture, based on sound and transparent analysis of debt sustainability, is urgently needed to address these debt challenges.

The debt chapter outlines four areas of actions to address these challenges, including actions to: i) strengthen debt management, debt transparency, and responsible borrowing and lending; ii) lower borrowing cost and enhance fiscal space for investment in sustainable development in developing countries; iii) achieve efficient, fair, predictable, coordinated, timely, and orderly restructurings; and iv) promote debt sustainability and credit assessment that are more accurate, objective and long-term oriented.

Panelists in this session are invited to pay particular attention to the proposals on strengthening and systematizing of liquidity and liability management support and on closing gaps in the debt architecture. They are invited to address the following questions:

• What are the key constraints to scaling up and ensuring coordinated support to countries to enhance fiscal space and lower their cost of borrowing, and to provide related financial instruments, such as debt swaps and credit enhancements at scale? (action 42)
• How can we provide such support at scale, taking into account the need for providing financial support, and for responsiveness to country-specific needs and circumstances? (42b)
• What are the most critical gaps that need to be closed to create a development-oriented debt architecture? (action 43).