Evaluating out-of-court debt restructuring in Romania. Paris, November 15, 2012 Impact Evaluation Workshop. Massimiliano Santini, Economist Andres Martinez, PSD Specialist . Agenda. Debt Restructuring Mechanisms and Reforms Key Findings from the Literature on Insolvency Reforms
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Paris, November 15, 2012
Impact Evaluation Workshop
Value Destruction* = Aggregate NPLs - Recovery Value
*International Financial Statistics (IMF), Doing Business Database (World Bank Group).
2. Introducing new mechanisms for debt restructuring and reorganization.
For example, out-of–court debt restructuring is perceived as more effective than the court process:
Key Findings from the Literature
Bankruptcy reforms increase timely repayments and reduce the cost of debt.
However, evidence is limited to few studies.
Reduce by 8.4% the failure rates of small and medium enterprises (Belgium).
Reduce duration of reorganizations from 34 to 12 months (Colombia).
Opportunity to launch a rigorous impact evaluation to study the reform’s impact.
Objectives of IE
Test the casual correlation of out-of-court debt restructuring on borrowers’ behavior:
Sample divided into:
Difference-in-difference approach to compare the two groups and determine effects of trainings on borrowers’ behavior following the intervention.
Continuous Data Analysis by the project team