Debts: Private Sector
The question
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of introducing legislation to compel private creditors to participate in debt relief.
Answered by Emma Reynolds
The UK, alongside the G20 and Paris Club, expects creditors, including private creditors, to participate in international debt restructurings on comparable terms.
At this stage, the government is not pursuing a legislative approach that would force private or other lenders to participate in debt restructurings.
Overall, we have seen evidence of private creditors’ willingness to engage and provide debt treatments where needed – though we continue to keep this under review.
The government is focused on delivering a market-based (contractual) approach to private sector participation, including taking the lead in developing Majority Voting Provisions for private group lending, to bind the minority to the terms of a restructuring. These promote more efficient restructurings and reduce the ability for creditors to hold out.
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