Sovereign Debt Working Group


Sovereign Debt: A Critical Challenge

This introductory paper is the first in a series in which BWC’s Sovereign Debt Working Group will present specific, actionable recommendations to improve the global debt resolution architecture. The paper explores the major weaknesses in sovereign debt restructuring and outlines the Working Group’s priority issues.  


An enduring consequence of the Covid-19 pandemic has been a substantial increase in the debt burden of countries around the world to levels that may not be sustainable. This crisis exposed previously unacknowledged weaknesses in the readiness and ability of both the public and private sectors to address the urgent liquidity needs of countries facing unprecedented financial stress. These issues have provided the impetus for a renewed public dialogue on debt restructuring to which the Bretton Woods Committee aims to productively contribute. 

To do so, the Bretton Woods Committee has formed a Sovereign Debt Working Group that comprises professionals with extensive, multidisciplinary experience. The Working Group will closely examine four issues that are central to addressing unsustainable debts and enabling countries to achieve sustainable growth: 

  • debt transparency
  • equitable burden sharing
  • private sector participation
  • state-contingent debt instruments 

The Working Group will share its analysis and recommendations in these areas through a series of six short papers to be released in 2021-2022.