World Bank Unveils New Era of Debt Transparency: 3 Pillars to Boost Global Financial Stability
The blog post from the World Bank explains that real debt transparency is more than just making public data about debt; rather, it is a quality indicator that governments, markets, and people can use to gain a better understanding of their debt risks. True debt transparency is based on three different “pillars”: 1) disclosure; 2) standards; 3) timely, comprehensive coverage. The first pillar of true debt transparency is disclosure, which means providing access to data (including metadata) and describing the data collection and sharing process.
Over the last ten years, the World Bank has expanded its International Debt Statistics (IDS) program to cover a much larger portion of the world’s external debt, thereby increasing usability and comparability. However, consistent definitions and reporting practices must also be used in conjunction with disclosure in order to create real debt transparency. The second pillar of true debt transparency is providing debt statistics that are consistent with other international standards, which will provide better comparisons. The upgraded Debtor Reporting System (DRS) has been released (2026) and will be connected to UN Trade and Development’s DMFAS and the Commonwealth Secretariat’s Meridian, and will be in cooperation with the International Monetary Fund through the Working Group on Charged Debts.
Additionally, the previous reconciliations with creditors for International Development Association countries have helped improve the consistency of data. Lastly, transparency must extend across more sectors, and reporting will need to occur more quickly. The IDS will include the debt of state-owned enterprises and will now have state-owned enterprise debt that comes from Turkish and Vietnamese entities, and there has been a sharp decrease in the amount of delayed submission since the foreword of the IDS in 2019. Overall, the continuous improvement of standards, coverage, and timeliness will promote trust, reduce borrowing costs, and facilitate better debt management.
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