Overview of Insolvency and Debt Restructuring Reforms in Response to the COVID-19 Pandemic and Past Financial Crises : Lessons for Emerging Markets
This note is part of the series of COVID-19 Notes developed by the World Bank Group’s Equitable Growth, Finance and Institutions (EFI) team. By highlighting concrete examples of insolvency and debt restructuring reforms undertaken in response to th...
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/182341615352260595/Overview-of-Insolvency-and-Debt-Restructuring-Reforms-in-Response-to-the-COVID-19-Pandemic-and-Past-Financial-Crises-Lessons-for-Emerging-Markets http://hdl.handle.net/10986/35425 |
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okr-10986-354252021-06-14T09:53:34Z Overview of Insolvency and Debt Restructuring Reforms in Response to the COVID-19 Pandemic and Past Financial Crises : Lessons for Emerging Markets Menezes, Antonia Gropper, Akvile INSOLVENCY DEBT RESTRUCTURING DEBT SERVICE CORONAVIRUS COVID-19 PANDEMIC RESPONSE SMALL AND MEDIUM-SIZED ENTERPRISES MICROENTERPRISES BANKING CRISIS EMERGING MARKET ECONOMIES This note is part of the series of COVID-19 Notes developed by the World Bank Group’s Equitable Growth, Finance and Institutions (EFI) team. By highlighting concrete examples of insolvency and debt restructuring reforms undertaken in response to the COVID-19 pandemic as well as past crises, this note highlights the importance of sound insolvency and debt restructuring regimes which are lacking in many emerging markets. Countries with under-developed or nascent insolvency frameworks should consider prioritizing the reforms covered in this note to improve their readiness to deal with a spike in business insolvencies. The note reviews insolvency and debt restructuring reforms aimed at addressing the economic effects of the COVID-19 crisis during two stages: the crisis containment stage and the crisis recovery stage. Crisis containment includes short-term insolvency law reforms adopted at the beginning of the COVID-19 outbreak to prevent businesses from being systematically pushed into insolvency. The objective of the reforms implemented during this stage was to ‘flatten the curve’ of insolvency cases and reduce the burden on institutions. Crisis recovery, the second stage, assesses actions taken by some countries during the COVID-19 crisis as well as during previous financial crises to address the medium-to-long term challenges of high levels of firm distress. The objectives of these second-stage reforms are generally to strengthen the institutional capacity and overall functioning of a country’s insolvency regime and to prevent a potential systemic banking crisis caused by elevated levels of non-performing loans. 2021-04-12T16:30:12Z 2021-04-12T16:30:12Z 2021-03-08 Working Paper http://documents.worldbank.org/curated/en/182341615352260595/Overview-of-Insolvency-and-Debt-Restructuring-Reforms-in-Response-to-the-COVID-19-Pandemic-and-Past-Financial-Crises-Lessons-for-Emerging-Markets http://hdl.handle.net/10986/35425 English Equitable Growth, Finance and Institutions COVID-19 Notes; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
INSOLVENCY DEBT RESTRUCTURING DEBT SERVICE CORONAVIRUS COVID-19 PANDEMIC RESPONSE SMALL AND MEDIUM-SIZED ENTERPRISES MICROENTERPRISES BANKING CRISIS EMERGING MARKET ECONOMIES |
| spellingShingle |
INSOLVENCY DEBT RESTRUCTURING DEBT SERVICE CORONAVIRUS COVID-19 PANDEMIC RESPONSE SMALL AND MEDIUM-SIZED ENTERPRISES MICROENTERPRISES BANKING CRISIS EMERGING MARKET ECONOMIES Menezes, Antonia Gropper, Akvile Overview of Insolvency and Debt Restructuring Reforms in Response to the COVID-19 Pandemic and Past Financial Crises : Lessons for Emerging Markets |
| relation |
Equitable Growth, Finance and Institutions COVID-19 Notes; |
| description |
This note is part of the series of
COVID-19 Notes developed by the World Bank Group’s Equitable
Growth, Finance and Institutions (EFI) team. By highlighting
concrete examples of insolvency and debt restructuring
reforms undertaken in response to the COVID-19 pandemic as
well as past crises, this note highlights the importance of
sound insolvency and debt restructuring regimes which are
lacking in many emerging markets. Countries with
under-developed or nascent insolvency frameworks should
consider prioritizing the reforms covered in this note to
improve their readiness to deal with a spike in business
insolvencies. The note reviews insolvency and debt
restructuring reforms aimed at addressing the economic
effects of the COVID-19 crisis during two stages: the crisis
containment stage and the crisis recovery stage. Crisis
containment includes short-term insolvency law reforms
adopted at the beginning of the COVID-19 outbreak to prevent
businesses from being systematically pushed into insolvency.
The objective of the reforms implemented during this stage
was to ‘flatten the curve’ of insolvency cases and reduce
the burden on institutions. Crisis recovery, the second
stage, assesses actions taken by some countries during the
COVID-19 crisis as well as during previous financial crises
to address the medium-to-long term challenges of high levels
of firm distress. The objectives of these second-stage
reforms are generally to strengthen the institutional
capacity and overall functioning of a country’s insolvency
regime and to prevent a potential systemic banking crisis
caused by elevated levels of non-performing loans. |
| format |
Working Paper |
| author |
Menezes, Antonia Gropper, Akvile |
| author_facet |
Menezes, Antonia Gropper, Akvile |
| author_sort |
Menezes, Antonia |
| title |
Overview of Insolvency and Debt Restructuring Reforms in Response to the COVID-19 Pandemic and Past Financial Crises : Lessons for Emerging Markets |
| title_short |
Overview of Insolvency and Debt Restructuring Reforms in Response to the COVID-19 Pandemic and Past Financial Crises : Lessons for Emerging Markets |
| title_full |
Overview of Insolvency and Debt Restructuring Reforms in Response to the COVID-19 Pandemic and Past Financial Crises : Lessons for Emerging Markets |
| title_fullStr |
Overview of Insolvency and Debt Restructuring Reforms in Response to the COVID-19 Pandemic and Past Financial Crises : Lessons for Emerging Markets |
| title_full_unstemmed |
Overview of Insolvency and Debt Restructuring Reforms in Response to the COVID-19 Pandemic and Past Financial Crises : Lessons for Emerging Markets |
| title_sort |
overview of insolvency and debt restructuring reforms in response to the covid-19 pandemic and past financial crises : lessons for emerging markets |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/en/182341615352260595/Overview-of-Insolvency-and-Debt-Restructuring-Reforms-in-Response-to-the-COVID-19-Pandemic-and-Past-Financial-Crises-Lessons-for-Emerging-Markets http://hdl.handle.net/10986/35425 |
| _version_ |
1764483006141038592 |