Flattening the Insolvency Curve: Promoting Corporate Restructuring in Asia and the Pacific in the Post-C19 Recovery
IMF Working Papers, January 29, 2021
Source details
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- Flattening the Insolvency Curve: Promoting Corporate Restructuring in Asia and the Pacific in the Post-C19 Recovery
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Bibliographic details
- Authors: W. A Bauer, R. S Craig, Jose M Garrido, Kenneth H Kang, Kenichiro Kashiwase, Sung Jin Kim, Yan Liu, Sohrab Rafiq
- Published: January 29, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513568096.001
Summary findings
- The Coronavirus disease (COVID-19) triggered a sharp contraction of economic activity across Asia and the Pacific.
- Initial policy response was a “whatever it takes” approach relying mainly on liquidity support to help firms survive the shock.
- As economies stabilize and enter the recovery phase, policy should evolve to support repair of firms’ balance sheets and adjustment of business models to post-pandemic realities.
- Priority: facilitate efficient restructuring of viable firms while allowing nonviable firms to exit.
Key policy recommendations (three complementary fronts)
- Reinforce private debt resolution frameworks to flatten the insolvency curve.
- Ensure adequate financing is available to support corporate restructuring.
- Facilitate access to equity to speed up the reallocation of jobs and capital into growth sectors.
Subject coverage and keywords
- Subject: Economic sectors, Financial crises
- Keywords: corporate restructuring, COVID-19, financial sector policy, fiscal response, insolvency frameworks
Content in this bundle
- Working Paper