Corporate Debt in Developing Countries Series: Critical Building Blocks for Reform and Restructuring

The scale and scope of the COVID-19 economic crisis has delivered an unprecedented shock to the global economy with impacts on firms’ credit and the financial sector. How prepared emerging markets and developing economies are to handle rising credit default risks and how to better target scarce resources? The discussion Corporate Debt in Developing Countries: Managing a Rising Threat to Global Recovery covered the most urgent needs, and which institutions are best placed to take action.

Watch the REPLAY of this conversation on March 4 with David Malpass, President of the World Bank Group; Carmen Reinhart, Vice President and World Bank Group Chief Economist; and Raghuram Rajan, Co-Chair of the G30 Working Group on Corporate Sector Revitalization.

This high-level panel discussion will look at the experiences and challenges experienced by senior policymakers in developing countries. Panelists will examine the conditions for preserving value in corporate restructurings and how countries are adapting legal and regulatory structures to the COVID-19 crisis, including insolvency and out-of-court workout mechanisms. They will discuss what has worked and what has not, as well as what is still needed to ensure that viable businesses can restructure and that those that need to exit the market can do so efficiently.

Watch the REPLAY of this conversation on March 19 with James Sprayregen, Restructuring Partner, Kirkland & Ellis; Reza Baqir, Governor, State Bank of Pakistan; Hal S. Scott, Emeritus Nomura Professor of International Financial Systems at Harvard Law School; Rosa Sacre, Managing Director of Société Générale’s Asset Recovery and Restructuring Management team; Ramiro Alfonsín, Chief Financial Officer of LATAM Airlines Group; Makhtar Diop, Managing Director and Executive Vice President, IFC; Stephanie von Friedeburg, Senior Vice President, Operations, International Finance Corporation.

This panel will explore how effects of the pandemic on the real sector can transmit to the financial sector and what tools multilateral and national policy makers have or consider essential to have to preserve the financial system stability. We will look at potential financial system risks and whether rising distressed assets in the financial sector are threatening stability. The panel will also discuss how emerging markets can manage increasing levels of non-performing loans—through bank-level solutions or other systemwide solutions or multilateral solutions.

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World Bank surveys indicate that micro, small and medium-sized enterprises (MSME) have been hit hardest by the COVID-19 crisis. This panel will look at whether the tools for managing credit default risks work well for both large and small firms or if specific tools and solutions need to be tailored for different types of firms. We will discuss how banks can manage large portfolios of MSME loans and the implications of their insolvency for personal and household debt.

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Rising corporate defaults can quickly undermine health of financial institutions and limit their ability to lend and support economic recovery. This panel discussion will look at how governments and the private sector can collaborate to ensure a sound environment for distressed asset resolution. Panelists will discuss how to share international best practices for managing credit default risks with local banks. They will also look at what is needed to create an active distressed asset market that can speed up resolution of debt issues and improve conditions for economic activity.

Watch the session live!