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Analysis of insolvency proceedings in Spain against the backdrop of the covid-19 crisis: insolvency proceedings, pre-insolvency arrangements and the insolvency moratorium

Author

Listed:
  • Miguel García-Posada Gómez

    (Banco de España)

Abstract

The inefficiency of Spanish insolvency proceedings – evidenced by their length and reflected in the fact that non-financial corporations and sole proprietors make limited use of both insolvency proceedings and pre-insolvency arrangements – is a structural shortcoming of the Spanish economy. It is a problem that has become particularly important against the backdrop of the COVID 19 crisis and the severe impact it is having on the financial situation of Spanish firms, despite the broad range of public measures introduced to mitigate it. This document analyses the functioning of the insolvency system, examines the pros and cons of the insolvency moratorium currently in place and proposes various alternatives that could make the system more efficient when the moratorium expires at the end of the year.

Suggested Citation

  • Miguel García-Posada Gómez, 2020. "Analysis of insolvency proceedings in Spain against the backdrop of the covid-19 crisis: insolvency proceedings, pre-insolvency arrangements and the insolvency moratorium," Occasional Papers 2029, Banco de España.
    • Handle: RePEc:bde:opaper:2029e
    as

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    File URL: https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosOcasionales/20/Files/do2029e.pdf
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    File URL: https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosOcasionales/20/Fich/do2029.pdf
    File Function: Spanish version
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    More about this item

    Keywords

    insolvency proceedings; pre-insolvency arrangements; insolvency moratorium; business activity; debt discharge; court congestion;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • K35 - Law and Economics - - Other Substantive Areas of Law - - - Personal Bankruptcy Law
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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