The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Nazim Belhocine, Daniel Garcia-Macia, and José Garrido
INTERNATIONAL MONETARY FUND
The modernization of Italy's insolvency framework has been the subject of much interest in recent
years, related not least to its role in potentially facilitating an efficient allocation of resources. A
unique feature of Italy's insolvency framework is a special regime for large enterprises known as
'extraordinary administration'. This paper evaluates the merits of this special regime by assessing
its efficacy and success in achieving its stated goals and comparing its features to international
standards and best practices. It finds that the special regime tends to impose large costs on
creditors and the state. The regime results, in most cases, in the sale of parts of the group, followed
by a liquidation phase of the remaining assets which can take longer than the general regime,
hindering legal certainty for creditors and more generally economic efficiency, investment and job
creation. Based on international best practices and experience, consideration should be given to
folding the special regime into the general insolvency regime, possibly with provisions to allow for
state intervention in specific well-defined circumstances.