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2021 World Bank & INSOL International’s Legislative & Regulatory Group: COVID-19 response and the challenges ahead Photo: Oze Creatives from Getty Images COVID-19 continues to present a variety of unique challenges for insolvency regulators and lawmakers worldwide. In March 2020, closing borders and widespread uncertainty underscored a crisis, prompting authorities around the world to devise and rapidly roll out measures designed to shield businesses, financial institutions and individuals against the economic effects and prevent widespread economic collapse. In Europe, for example, there w...

Photo: Khasar Sandag / IFC  But many insolvency systems fall short in moving quickly to save viable businesses. This is in part because bankruptcy carries social stigma, which encourages debtors to delay recognition of financial challenges. In many countries, the absence of early warning systems, by which auditors or corporate bodies inform the directors of identified financial threats, further explains this tendency. As a result, insolvency proceedings often get started when there is nothing left to save. What could have been the reorganization of a distressed company—if tackled on time�...

COVID-19 and corporate balance sheet vulnerabilities in emerging markets and developing economies Image The non-financial corporate (NFC) sector in emerging markets and developing economies (EMDEs) entered the pandemic with elevated financial vulnerabilities and corporate debt currently stands at record levels: the World Bank estimates that non-financial corporate debt for EMDEs stood at 39.1 percent in 2019, 1 up from 34.9 percent in 2010; the BIS estimates a much higher level of 102 percent for a group of large EMDEs 2 in 2020Q1, up from 71 percent a decade ago. Against the backdrop of a ...