UNITED STATES (OBSERVATORY) – The head of the US Treasury, Steven Mnuchin, called on the International Monetary Fund (IMF) to play a more active role in regulating the debt burden of debtor countries, as such “non-transparent creditors”, like China, destabilize the borrowing market.
“The growth of sovereign and private loans, especially in countries with already high debt burdens, complicates the debt settlement processes necessary to restore the sustainability of their debt, and increasingly we see instances of an uncontrolled, opaque process of lending to these countries by sovereign developing lenders such as China, or private companies,” said Mnuchin, speaking at a spring meeting at the IMF.
Mnuchin noted that such borrowing creates problems in the restructuring of debt of debtor countries and clear rules in this case there is no settlement of this issue.
“The IMF can play a decisive role in this matter by more regular and reliable interaction with these entities, by facilitating the use of mechanisms to ensure debt sustainability by the governments of the member countries of the fund,” he explained.
Earlier, similar accusations against China were made by experts at the American Institute of CSIS. Among them was a representative of the US Ministry of Finance.