Dealing with Private Debt Distress in the Wake of the European Financial Crisis A Review of the Economics and Legal Toolbox

February 20, 2013

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Yan Liu, and Christoph B. Rosenberg Dealing with Private Debt Distress in the Wake of the European Financial Crisis A Review of the Economics and Legal Toolbox, (USA: International Monetary Fund, 2013) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The private non-financial sector in Europe is facing increased challenges in meeting its debt servicing obligation. In response, governments are revisiting legal tools and—in some cases—institutional arrangements to deal with over-indebtedness. For households, where the problem in some countries is large but no established best practice exists, reforms have generally sought to allow debtors a fresh start while minimizing moral hazard and preserving bank solvency and credit discipline. For the corporate sector, efforts have focused on facilitating debt restruturing (including through out of court mechanisms). Direct government intervention has been rare.

Subject: Asset and liability management, Corporate insolvency, Debt restructuring, Financial crises, Financial sector policy and analysis, National accounts, Private debt, Solvency

Keywords: A number of country, Baltics, Corporate insolvency, Country, Court, Court insolvency regime, Debt restructuring, Europe, Government, Government intervention, Government support scheme, Household insolvency, IMF country desk, Insolvency proceeding, Private debt, Private sector debt, Procedure, Solvency, Track court approval procedure, WP

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/044
Stock No:

WPIEA2013044
ISBN:

9781475544305
ISSN:

1018-5941

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