Policy Brief No. 175 — August 2022 - Lending to Defaulters: The IMF Updates Its Lending

of an economic factor to the analysis Only a handful of specialists in the market understand and the removal of a condition that how it works, and the IMF itself has trouble speaking countries engage with their creditors clearly on the topic. [...] Perhaps “lending to defaulters” more clearly the Republic of Colombia establish its describes the policy’s function because that is what debt management team in the mid-1990s, the policy is designed to do: determine whether assisting the Republic of the Philippines in the IMF should lend to a country in default. [...] The impulse for the change of policy taken place in the latter half of the 1990s: they was a conservative backlash against the bailouts wanted sovereign bonds to be restructured the way of the 1990s (US Government Printing Office 2000). [...] faith criterion of its lending into arrears policy now included the “expectation” that a country would The historical context for the focus on the lending negotiate with a representative creditor committee into arrears policy was the rise of the sovereign if one formed in a timely manner (IMF 2002, 3). [...] with Argentina and its creditors on the terms of the Lending to Defaulters: The IMF Updates Its Lending into Arrears Policy 7 offer as part of its responsibility for determining the country’s compliance with the policy.