Policy Options for Supporting and Restructuring Firms Hit by the COVID-19 Crisis

By Juliana Dutra Araujo, Jose M Garrido, Emanuel Kopp, Richard Varghese, Weijia Yao

February 23, 2022

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Juliana Dutra Araujo, Jose M Garrido, Emanuel Kopp, Richard Varghese, and Weijia Yao. Policy Options for Supporting and Restructuring Firms Hit by the COVID-19 Crisis, (USA: International Monetary Fund, 2022) accessed September 19, 2024

Disclaimer: The views expressed herein are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper presents principles that could guide the design of more targeted policy support and facilitate the restructuring of firms adversely impacted by the COVID-19 pandemic. To this end, the paper takes stock of vulnerabilities and risks in the enterprise sector and assesses countries’ preparedness to handle a large-scale restructuring of businesses. Crisis preparedness of insolvency systems is measured according to a newly designed indicator that includes five dimensions of the insolvency and restructuring regime (out-of-court restructuring, hybrid restructuring, reorganization, liquidation, and the institutional framework). Vulnerabilities tend to be more pronounced in jurisdictions with shortcomings in crisis preparedness, and those countries need to step up efforts to improve their insolvency systems.

Subject: Asset and liability management, Corporate sector, Crisis prevention, Debt restructuring, Economic sectors, Financial crises, Financial sector policy and analysis, International organization, Political economy, Solvency

Keywords: Corporate Debt, Corporate sector, COVID-19, Crisis prevention, Debt restructuring, Global, Insolvency, Liquidation, Nonfinancial firm, Policy option, Policy support scheme, Reorganization, Restructuring, Restructuring firm, Solvency, Solvency support, Solvency Support to Enterprises, Untargeted support

Publication Details

Pages:

78
Volume:

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DOI:

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Issue:

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Series:

Departmental Paper No 2022/002
Stock No:

POSRFEA
ISBN:

9781513593463
ISSN:

2616-5333

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