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International Monetary Fund

-debtor is, in the final analysis, less important than the extent to which these rules are effectively implemented by a strong institutional infrastructure. In particular, given the complex and urgent nature of insolvency proceedings, effective implementation requires judges and administrators that are efficient, ethical, and adequately trained in commercial and financial matters and the specific legal issues raised by insolvency proceedings. A pro-debtor law that is applied effectively and consistently will engender greater confidence in financial markets than an

Mr. Sean Hagan

individuals and institutions charged with implementing them. Although countries make different policy choices as to how risk should be allocated, experience demonstrates that participants are able to manage this risk if the rules are applied predictably. A pro-debtor law that is applied consistently will engender greater confidence than a pro-creditor law that is applied in an arbitrary way. The allocation of risk must also be perceived as being equitable . Unlike secured-transactions law, an insolvency law is designed to address a debtor’s inability to pay its creditors

International Monetary Fund. External Relations Dept.
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