IX. Debt Restructuring
Author:
International Monetary Fund. Legal Dept.
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Language:
English
Keywords:
SEM; bank; market; rating agency; CDR mechanism; ratings quality; requirement ratio; fair value accounting; Credit; Debt restructuring; Capital adequacy requirements; Financial sector stability; Global; Europe
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Abstract

The financial crisis posed major challenges to policy makers and regulators as they worked towards stabilizing financial markets and prevent a further meltdown and the slide of the global economy from its deepest synchronized recession in six decades into possible depression. As countries now move from the initial crisis containment phase, a period of sustained corporate and operational debt restructuring can be expected in order to repair corporate balance sheets and to realign the corporate sector to the post-crisis economy. The insolvency law is the most important tool to support orderly corporate debt restructuring. Many countries have enacted reforms to their legal frameworks relevant to corporate debt restructuring over recent years. In fact, the major thrust of insolvency reform across many jurisdictions over the last twenty years has been the development of legislation to facilitate business reorganizations. However, in many emerging economies, the corporate restructuring regime does not even exist. These countries would have realized the need for introducing legal reforms to introduce efficient and effective corporate restructuring regimes. Given that changes to insolvency laws and the underlying institutional structure take time to effect, country authorities need to begin diagnosis of the debt problem and to anticipate the legal bottlenecks at an early stage. Furthermore, the onset of a crisis could present an opportunity for the authorities to galvanize relevant stakeholders into reform mode.

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Cover Current Developments in Monetary and Financial Law, Volume 6
Current Developments in Monetary and Financial Law, Volume 6
Restoring Financial Stability--The Legal Response
Author:
International Monetary Fund. Legal Dept.
ISBN:
9781616350819
Publication Date:
08 Feb 2013
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781616350819.072
Pages:
590
Figure 1.

Structure of Construction REITs
Figure 2.

Structure of Private Fund Vehicle Scheme
Figure 3.

Trust and Securitization of Claims for Construction Costs
Figure 4.

Insolvency Schemes of Korea
Figure 5.

The Learning Curve over the Past 50 Years
Figure 1.

Household Indebtedness in 2000 and 2006

(% of Nominal Disposable Income)
Figure 2.

Household Mortgage Indebtedness in 1996 and 2006

(% of Nominal Disposable Income)