What is the functions of London Club?

1. Restructuring Sovereign Debt: The London Club is a group of private commercial banks that work together to restructure sovereign debt owed to them by developing countries. The club serves as a forum for negotiations between the banks and the country in question, with the goal of reaching an agreement that allows the country to repay its debts while avoiding default.

2. Facilitating Debt Rescheduling: The London Club plays a crucial role in rescheduling debt payments, providing the country with a manageable repayment schedule that takes into account its economic situation. Rescheduling can involve extending the repayment period, reducing interest rates, or a combination of both.

3. Offering Debt Relief: In cases where a country is facing severe financial difficulties, the London Club may consider providing debt relief. Debt relief can take various forms, such as reducing the principal amount of debt, canceling a portion of the debt, or providing extended grace periods before repayment begins.

4. Advocacy and Representation: The London Club represents the interests of its member banks and works to ensure that their rights are protected in debt restructuring negotiations. The club advocates for fair and equitable treatment for its members while also recognizing the need to support sustainable development in the debtor countries.

5. Encouraging Debt Transparency: The London Club promotes debt transparency by encouraging debtor countries to disclose accurate and timely information about their debt obligations. Transparent debt management helps build confidence among investors and lenders, which is crucial for attracting foreign capital and promoting economic growth.

6. Promoting Voluntary Debt Restructuring: The London Club prefers a voluntary approach to debt restructuring, relying on negotiations and cooperation between the debtor country and the banks. This approach aims to avoid the need for involuntary debt restructuring, which could involve legal proceedings and the imposition of unfavorable terms on the debtor country.