FSB launches thematic peer review on corporate debt workouts and invites feedback from stakeholders
30 June 2021
The objective of the review is to support COVID-19 response efforts by examining FSB member jurisdictions’ practices, experiences and lessons from out of court debt workouts (OCWs), and the implications for financial stability.
The peer review will take stock of existing and planned OCW
frameworks in FSB jurisdictions. It will examine the experience of
particular mechanisms that have been or are being used to address
corporate stress, including the role of financial sector authorities.
The review will also seek to identify good practices and examples of how
well OCW frameworks have worked in terms of preserving value for viable
companies and how useful their debt restructurings are for resolving
non-performing loans and dealing with a large number of distressed
corporates.
The Summary Terms of Reference
provide more details on the objectives, scope and process for this
review. The FSB has circulated a questionnaire to its member
jurisdictions to collect information in this area.
In addition, as part of this peer review, the FSB invites feedback
from financial institutions, corporates, insolvency practitioners and
other stakeholders on out of court corporate debt workouts. This could
include comments on:
-
the types of OCW frameworks (e.g. informal workouts, enhanced
workouts and hybrid workouts) most often used in your jurisdiction and
why;
-
features of OCW frameworks that may be particularly helpful to
minimise the economic and financial system damage caused by corporate
defaults due to COVID-19;
-
the appropriate role of financial sector authorities in facilitating
debt restructuring, including to incentivise the participation of
various stakeholders in an OCW; and
-
experiences and challenges in the use of OCWs, including to manage the volume of non-performing loans in the financial system.
Feedback should be sent to fsb@fsb.org
by 9 August 2021 under the subject heading “FSB Thematic Peer Review on
Corporate Debt Workouts”. Individual submissions will not be made
public. The peer review report will be published in early 2022.
Notes to editors
The FSB began a regular programme of peer reviews in 2010, consisting
of thematic reviews and country reviews. Thematic reviews focus on the
implementation and effectiveness across the FSB membership of
international financial standards developed by standard-setting bodies
and policies agreed within the FSB in a particular area important for
global financial stability. Thematic reviews may also analyse other
areas important for global financial stability where international
standards or policies do not yet exist. Peer reviews are conducted
according to the objectives and guidelines set out in the Handbook for FSB Peer Reviews. All published peer review reports are available on the FSB website.
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