Slow progress was made during the G7 finance ministers meeting in Tokyo in January on how to involve the private sector in crisis resolution. Christian Sautter, French finance minister, “reject[ed] the idea of privatisation of profit and socialisation of losses”. The G7 are looking at ways to translate national level mechanisms for indemnifying creditors to the international level. Proposals focus on the IMF as the central authority administering such a mechanism.
Paul Martin, Canadian Finance Minister and chairman of the G20, has also stated that “the absence of principles to guide debtor-creditor relations in periods of severe distress has tended to magnify the severity of these crises. It is in the interest of all, creditors as well as borrowers, to know in advance the framework under which claims will be resolved in the event of financial disruptions”.
Despite clear signs that the those outside the US favour explicit procedures and principles, the US still favours a case by case approach which has seriously complicated efforts to find a solution.