The risky interconnectedness between investment funds and developing country debt

Discussion paper

Publication

16 October 2019

This discussion paper intends to raise awareness how the dynamics of the investment fund industry contribute to more volatile financial markets and irresponsible lending, which in turn affects the debt repayment risks for developing countries.

The first part of this briefing exposes the risky interaction between the investment fund industry and the debt issuing carried out by developing countries. The second part gives the example of a government bond issued by Ghana and its integration into investment funds. It discloses how ownership of the bonds is being scattered around the world while profits are being made throughout the investment industry without responsibility for its impacts.