IPD AI Insights

Press Release addressing Debt Crises

Topics on: Business & Society, Financial Policy, Leadership
Debt and Global Finance

On December 9th, 2024, the Pontifical Academy of Social Sciences (PASS) and Initiative for Policy Dialogue (IPD) published proposals for international financial architecture reforms that would promote debt sustainability in countries across the Global South. In Vatican City in June 2024, IPD and PASS convened leaders of financial institutions, academic experts, civil society advocates, and religious figures to discuss potential solutions to the growing global debt crisis.

12/09/2024
Pontifical Academy of Social Sciences (PASS)

Overview

Experts analyzed potential reforms that are ever-more urgent: In many countries, debt crises—or the fear of potential default and crisis— mean governments are not cutting on the most critical investments in healthcare, education, climate adaption, and other forms of development.

The PASS/IPD statement published on December 9th, 2024, outlines the tangible proposals for reform developed as a result of the conference in Vatican City.

There is no international mechanism for the resolution of sovereign debt crises, nothing equivalent to domestic corporate bankruptcy codes. Under current international financial frameworks, international financial institutions may end up bailing out private lenders when debts are unsustainable rather than demanding debt restructurings that restore debt sustainability and ensuring the financing they provide is used for investments in sustainable development. At the PASS/IPD conference, Pope Francis called for an international mechanism for sovereign debt restructuring , and encouraged financial leaders to “follow an international code of conduct with ethical standards that can guide dialogue between parties.”