Credit Suisse CEO welcomes pact on lending to developing countries
GENEVA (Reuters) – Credit Suisse chief executive Tidjane Thiam on Friday welcomed a draft pact to make lending to developing countries more transparent, saying the “transformational” deal could lower their borrowing costs.
Financial leaders from the world’s major economies this month adopted new principles to ensure that countries that lend and borrow for infrastructure spending do so in a sustainable manner.
The principles, approved by finance ministers and central bank governors of the Group of 20, now go to the G20 leaders’ summit in Japan on June 28-29.
“We expect the big banks of the world, including us, to voluntarily become signatories to these principles as they will bind us to a high level of transparency around our loans,” Thiam said at a alumni forum. INSEAD, an organization based in Paris. business school from which he graduated in 1988.
“And we hope and expect more importantly that this transparency will lead to lower risk premiums for emerging market debt and also to greater investor confidence in the countries in which they invest.”
He pointed out that around 15 African countries were now technically in a state of debt distress with debt levels that jeopardize their economic development and political stability.
Credit Suisse has had its own problems with lending to poor countries. He is one of the lenders who helped organize $ 2 billion in government guaranteed loans that plunged Mozambique into a debt crisis from which it is still struggling to recover.
The International Monetary Fund and foreign donors halted support when the loans were leaked in 2016, triggering a currency collapse and a default on Mozambique’s sovereign debt.
Mozambique filed a case in the High Court in London against Credit Suisse in February.
A former Credit Suisse banker pleaded guilty last month to a US charge that she helped launder money as part of a bribe scheme involving loans to state-owned companies in Mozambique.
Credit Suisse said the defendants withheld their contact from the bank.
Reporting by Stéphanie Nebehay; Writing by Michael Shields; Editing by Jan Harvey