§5331 International Initiative

Summary

The Secretary of the Treasury must study whether creating an International Debt Management Authority is practical and a good idea. If the Secretary finds that starting talks about the authority would significantly raise the discount on sovereign debt sales, or raise the chance of default, or increase the chance of problems paying debt, the Secretary must explain in detail those reasons in interim reports to Congress. If not, the Secretary must begin talks with chosen industrialized and developing countries to try to set up an authority that would buy less-developed countries’ sovereign debt from private creditors at a discount, help restructure debt to ease payments and boost growth, and help banks deal with their developing-country loan portfolios. The Secretary must include proposals that debt relief come with strong debtor commitments to better economic policies and a growth plan, that funding support come from industrialized countries (more from those with big current account surpluses), that the authority work closely with the IMF, the World Bank, and regional development banks, that it operate without routine government funding and follow the applicable legal limits, and that it have a set end date with a plan to restore debtor creditworthiness. At the end of the 6‑month and 12‑month periods starting August 23, 1988, the Secretary must report progress to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and to the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate and consult with them. When the study or talks finish, the Secretary must send a full report and any suggested legislation to those same committees.