Moldova Financial Sector Assessment Program : Insolvency and Creditor/Debtor Regimes--Report on the Observance of Standards and Codes
The World Bank assessed the insolvency and creditor or debtor regimes (ICR) of Moldova pursuant to the joint international monetary fund (IMF) and World Bank initiative on the observance of standards and codes (ROSC). The Moldovan authorities have...
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| Language: | English en_US |
| Published: |
Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/10/25149651/moldova-financial-sector-assessment-program-insolvency-creditor-or-debtor-regimes-report-observance-standards-codes http://hdl.handle.net/10986/22904 |
| Summary: | The World Bank assessed the insolvency
and creditor or debtor regimes (ICR) of Moldova pursuant to
the joint international monetary fund (IMF) and World Bank
initiative on the observance of standards and codes (ROSC).
The Moldovan authorities have made remarkable progress over
the last decade in taking on board a broad range of reform
related to the commercial law regime, including the laws
pertaining to creditor protection and insolvency. Loans are
often over collateralized, reducing available credit and
increasing the incentives for lenders to rely primarily on
their collateral for repayment rather than to support
restructuring efforts. The secured transactions regime
requires improvement, importantly regarding the facilitation
of important credit instruments over category of assets. The
rules aimed at encouraging good corporate behavior at times
of financial distress may be improved and obstacles on
insolvency filing by creditors removed to ensure timely
filing of insolvency proceedings. There are also certain
risks to creditor rights, including through abuse of the
process by other creditors, which may disincentive the use
of the system. The insolvency regime is now much more
modern, but it has implementation problems, and some aspects
of the law may require strengthening, including the
cumbersome criteria for initiating insolvency proceedings by
creditors, the lack of rules that incentivize new lending to
the business in insolvency, the rules regarding transaction
avoidance, due process aspects and some other rules
adversely affecting creditor rights, the law and practice
concerning the use of encumbered assets, and the
decision-making process during insolvency especially in a
restructuring context. The recommendations in this report
are presented with the hope that they will assist the
authorities in their continuing efforts to enhance the
country’s legal and regulatory framework for enterprise credit. |
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