§5331 International Initiative

Summary

The Secretary of the Treasury must study whether it makes sense to create an International Debt Management Authority. Unless the Secretary finds that starting talks would badly raise the discount on sovereign debt, raise the chance of default, or increase the chance of debt payment failures, the Secretary must begin talks with selected industrialized and developing countries to set up an authority that would buy poorer countries’ sovereign debt at discounts, negotiate debt restructurings to ease payments and help growth, and help banks sell their developing‑country loan holdings. If the Secretary makes a finding that talks would cause those bad effects, the Secretary must explain why in the interim reports to Congress. In those talks the Secretary should propose that any debt help require debtor countries to commit to economic reforms and a growth plan; ask for support mainly from industrialized countries (more from those with strong current account surpluses); set up close working ties with the IMF, the World Bank, and regional development banks; design the authority to be self‑supporting and follow the prohibitions in the first sentence of section 5332(a); and give it a clear end date and a plan to restore debtor creditworthiness. The Secretary must send reports on progress at the end of the 6‑month and 12‑month periods beginning August 23, 1988, and a final report and any legislative recommendations to the named House and Senate committees.