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

Yan Liu and Christoph Rosenberg

No 2013/044, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; country; government; procedure; court; track court approval procedure; private sector debt; household insolvency; corporate insolvency; government intervention; insolvency proceeding; a number of country; IMF country desk; court insolvency regime; government support scheme; Solvency; Debt restructuring; Private debt; Europe; Baltics (search for similar items in EconPapers)
Pages: 21
Date: 2013-02-20
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Citations: View citations in EconPapers (18)

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