- New private sector tools strongly supported by the UK
government will help resolve sovereign debt crises faster,
cutting economic damage in developing countries
- Proposals build on Chancellor Rachel Reeves' securonomics by
strengthening global economic stability and protecting British
business
- Ongoing work will continue to provide practical tools for
negotiating debt crises while cementing London as a world-leading
emerging markets hub
Developing countries will be able to respond faster to economic
crises through new proposals developed by the London Coalition on
Sustainable Sovereign Debt and driven by the UK government.
These are designed to reduce the delays and uncertainty that make
debt crises more damaging – for developing countries and for
British investors and businesses with exposure to emerging
markets.
Debt crises are becoming more common as global shocks increase.
Faster and more predictable resolutions mean less economic
damage, more stable markets and stronger growth in the UK and
abroad. This is the Chancellor's ‘securonomics' in action –
building a more resilient global economy to protect families and
businesses from knock-on effects of international instability.
Two key products have been published this week by the London
Coalition Secretariat:
- The Pause Clause Proposal and Term Sheet, developed by a
group of leading international bondholders, will allow countries
hit by major shocks to temporarily defer debt payments in a
clear, time-bound way, building on precedents in Barbados and
Grenada. This will sit alongside strong debt transparency so
markets can price risk properly, and the group will continue
consulting with developing countries to support uptake.
- The Implementation Guide for Restructuring Private Sector
Sovereign Loans developed by leading commercial lenders provides
a practical, voluntary reference on how to organise engagement
and streamline discussions. This will help reduce delays and
uncertainty in negotiations and limit the economic damage that
prolonged debt distress can cause.
Economic Secretary to the Treasury, , said:
By working with private creditors and international partners, we
are harnessing the UK's world-leading role as an emerging markets
hub to support greater stability and resilience for developing
economies.
We're tackling the increasing number of worldwide economic shocks
by strengthening the global financial system, safeguarding
development gains, and protecting British business.
Co-Chair of the London Coalition and Former Chairman of
Standard Chartered Bank. José Viñals said:
Emerging markets and developing economies are being hit by more
frequent and severe shocks, but debt restructurings are still too
slow and unpredictable. This further increases the economic
damage.
The Coalition is focused on practical fixes – like a new guide
for restructuring private loans and crisis pause clauses. These
practical, voluntary tools, can make negotiations faster and more
orderly when it matters most.
Efforts are being coordinated by the London Coalition
Secretariat, a multistakeholder forum launched by the UK
government in 2025 and co-chaired by the Economic Secretary to
the Treasury and José Viñals.
The Coalition is focused on turning shared principles into
practical, voluntary tools that sovereign borrowers in developing
countries and private creditors can use in live negotiations to
make outcomes faster, clearer and more predictable in response to
economic shocks.
Both documents have been developed by private sector groups and
follow iterative discussions held between the Coalition and
borrowers in developing countries, investors, official sector
stakeholders, rating agencies, and other market participants.
These new pause clauses draw on the UK's experience with Natural
Disaster Clauses in UKEF lending, extending a similar
shock-responsive approach to sovereign bonds.
This reinforcing London's position as a leading emerging markets
finance hub where standards and market practices evolve to
support resilience and transparency.
Notes to editors:
- Find the two products published here:
