Communiqué of the ministers and governors of the Group of Ten

The Finance Ministers and Central Bank Governors of the countries of the Group of Ten met in Washington on 26 September 1999. The meeting was chaired by Mr. Bosse Ringholm, the Minister of Finance from Sweden. Ministers and Governors took note of reports from Mr. Henk Brouwer, Chairman of the Deputies of the Group of Ten; Mr. Michel Camdessus, Managing Director of the IMF; Mr. Jean-Jacques Rey, Acting Chairman of WP3 of the OECD; and Mr. Andrew Crockett, General Manager of the BIS.

Ministers and Governors discussed international financial crises and the role of the private sector in their prevention and resolution. They expressed support for the framework for private sector involvement in crisis resolution set out at the Cologne summit in June, and they reaffirmed the principles that debtors should honour their obligations and contracts and that no one category of private creditors should be regarded as inherently privileged relative to others in a similar position. They emphasised the importance of frank and frequent dialogue between debtors and creditors in developing the confidence needed for continued market access and in facilitating the co-operative action needed to resolve unexpected payment difficulties. They noted that the growing diversity of the investor community makes the development of transparent and effective channels of communication between debtors and creditors more important than in the past. Ministers and Governors also noted the constructive role that the voluntary use of collective representation and majority action clauses in sovereign bond issues could play in the resolution of financial crises. They welcome and encourage efforts by the private sector to promote the wider use of collective action clauses and similar arrangements in sovereign bond issues. They undertook to examine the modalities relating to the inclusion of the most appropriate collective action clauses in foreign-currency sovereign bond issues. Ministers and Governors reaffirmed their overall objective of fostering improvements in market practices relating to foreign-currency bond issuance.

Ministers and Governors reviewed preparations for Y2K and the arrangements being put in place to forestall any national or international liquidity problems arising from the century date change. They stressed the importance of public and private sector officials pressing forward this autumn with contingency plans in the financial sector and between the financial sector and other critical sectors, such as power and telecommunications. They reviewed the comprehensive efforts of central banks and other financial authorities within the G10 countries to ensure that their financial systems function normally over the year end. They welcomed the establishment by the IMF, as part of its own contingency planning, of the temporary Y2K Facility. This facility would provide support to member countries in the event they experience international liquidity problems resulting from the century date change.

Ministers and Governors took note of the significant ongoing changes in the financial sector of their countries. They asked their Deputies to analyse the forces driving these changes and to assess their broader implications.

The Minister of Finance from Switzerland, Mr. Kaspar Villiger, was elected Chairman of the Group of Ten for one year.