World Bank, IMF Back Overhaul of Debt Framework for Poor Nations

The World Bank and the International Monetary Fund have endorsed changes to the framework used to restructure the debts of low-income countries, according to a Reuters report. The two Washington-based institutions are backing a revision of the process that governs how struggling economies seek relief from lenders.

The framework was created by the Group of Twenty to give poorer nations a quicker, more predictable path to restructuring. In practice, talks have frequently stretched for years, held up by the need to coordinate official creditors, multilateral lenders and private bondholders.

Both institutions have argued that delays carry real costs, leaving governments unable to plan budgets, invest in infrastructure or fund basic services while negotiations continue. Faster, more consistent treatment would let countries return to financial markets sooner and reduce the risk of prolonged default.

The specifics of the proposed adjustments were not detailed in the initial report, and any overhaul would still require agreement among governments and creditors. Even so, support from the World Bank and the IMF gives added momentum to a debate that has drawn growing attention as debt burdens weigh on some of the world's most vulnerable economies.