The British Parliament has passed a new legislation restricting claims on vulture funds, a predator practice of buying off the debt of developing countries at lower prices then making claims of the full amount through courts, IRIN reports.
Hailed as a landmark legislation, the new law protects borrowing countries - the world’s poorest - from debt claims of creditors. Countries listed under the World Bank and International Monetary Fund’s Heavily Indebted Poor Countries Initiative fall under the law’s protection, Reuters said.
“It’s the first time since the global credit crunch that financial services companies have been told, ‘Thus far and no further’. They won’t be able to fleece developing countries, and they will have to comply with the same rules on debt relief as the public sector and the more responsible parts of the private sector,” said the bill’s proponent Sally Keeble, as quoted by IRIN.