When an institution declares that under no circumstances will it reform you can be sure it faces a rocky future. The idea that any economic player, public or private, can carry on acting in the same old way, regardless of external changes, strikes most people as absurd. Yet this is what the Paris Club believes. Events will surely force it to shape up or wind up.
The Paris Club is the informal group of sovereign creditors that meets to reschedule the official debts of developing countries. In times past when official Financing dominated capital Flows to emerging markets, the Paris Club could afford the luxury of dictating terms to the debtors and the private sector.
Apart from occasional interference by politicians, creditor mandarins were left to get on with the job and happily turned themselves into hard-hearted debt collectors. As the organizers of the club, French treasury officials were in the most privileged position of all. But now the Paris Club is under attack from every side and has the choice either to reform itself or become redundant.
The main reason for the demise of the Paris Club is that the official Flows, of which it is the guardian, are dwindling into insignificance.