AGOA exclusion adds to economic pressure on Ethiopia

Significance This adds to the bad economic news for the country, which recently had to postpone its second telecoms licensing round, is still waiting to restructure its foreign debt and faces huge reconstruction costs in conflict-affected areas. Impacts Foreign companies that have evacuated personnel, let alone tourists, may be slow to return until the security situation improves markedly. A debt restructuring deal should be reached this year, easing fiscal pressure after the end of the G20 Debt Service Suspension Initiative. Ethiopia’s AGOA exclusion is not up for review again until 2023, and could even be extended absent real improvement in the situation.

Schemes of Arrangement

Schemes of arrangement are an important and flexible mechanism, which can be used to reorganise a company's capital. Schemes have undergone a renaissance over the last twenty years, particularly as a debt restructuring device in the aftermath of the 2008 financial crisis when companies and their advisors have needed to develop effective tools for dealing with financial distress. The COVID-19 pandemic has provided a further incentive for jurisdictions to ensure that they have an effective debt restructuring mechanism in place. Schemes have also become the mechanism of choice for recommended takeovers. This book performs a critical, contextual and comparative analysis of schemes and their uses, examines recent developments in this area, including the Corporate Insolvency and Governance Act 2020, and considers whether further reform is needed to ensure that schemes continue to develop as an indispensable tool for companies for the future.

Turnaround Initiatives and Going Concern Opinion

The main purpose of this study is to examine the role of Statement on Auditing Standards (PSA) No. 30 which requires an independent auditor to evaluate management actions to overcome the financial distress of the company to reduce the possibility of going concern opinion acceptance. Implementation of turnaround initiatives consists of additional capital, borrowing and debt restructuring, asset sales and cost reduction activities. The population of this research is 454 manufacturing companies listed on Indonesia Stock Exchange during 2011-2013. This study finds that borrowing and debt restructuring are positive information which reduces the probability of receiving going concern opinions. Whereas, cost reduction is the negative information that increases the probability of receiving going concern opinion. That shows there is no significant effect of withdrawal of capital and asset sales activities on the probability of going concern opinion acceptance.

How diabolic is the sovereign-bank loop? The effects of post-default fiscal policies

The deleterious effect of debt restructuring on banks’ balance sheets and, consequently, on the economy as a whole has been a key policy issue. This paper studies how post-default fiscal policy interacts with this sovereign-bank loop and shape the response of a model economy. Calibration of the model matches characteristics of the Greek economy at the time of the bond exchange. Debt restructuring in place of higher lump-sum taxation or lower nonproductive government spending harms the economy even if no other cost of default is considered. However, the sovereign-debt loop is less costly to the economy than increases in labor or capital taxes to service debt. Even so, if fiscal policy is too responsive, a crowding-out effect inhibits the recovery of capital markets, hence a more conservative fiscal stance is desirable. Thus, how diabolic the post-default sovereign-bank loop is depends to a large extent on the way fiscal policy responds.

МІЖНАРОДНО-ПРАВОВІ АСПЕКТИ СПІВПРАЦІ УКРАЇНИ З МІЖНАРОДНИМИ ФІНАНСОВИМИ ОРГАНІЗАЦІЯМИ

Розглянуто форми та напрямкиспівпраці України з такими міжна-родними фінансовими організаціями,як Міжнародний валютний фонд,Міжнародний банк реконструкціїта розвитку, Міжнародна фінан-сова корпорація, Міжнародна групаз протидії відмиванню грошей,Базельський комітет з банківськогонагляду, Міжнародна організаціякомісій із цінних паперів, Міжна-родна організація страхових нагля-дів. Зазначено, що співпраця Україниз цими міжнародними фінансовимиорганізаціями здійснюється у двохосновних напрямках: 1) розробкаміжнародно-правових фінансовихнорм та консультативно-технічнапідтримка щодо сприяння їх імпле-ментації у національне законодав-ство; 2) фінансування (отриманняпозик, реструктуризація боргу,гарантування позик тощо).Проаналізовано особливостіспівробітництва України і МВФ уперіод з 1992 до 2021 року. Розгля-нуто фінансову та «не фінансову»форми співпраці з МВФ, види нада-них Фондом програм фінансуваннята виконання Україною зобов’я-зань перед МВФ на різних етапахспівпраці. Технічну допомогу (нефінансову) Фонд надає у сферімакроекономічної політики, грошо-во-кредитної політики, управліннявитратами, податкової політики,забезпечення стабільності фінан-сового сектору.Сформульовано наступні нап-рямки підвищення ефективностіспівпраці з МВФ: 1) максимальневикористання можливостей МВФзадля сприяння розвитку країнишляхом проведення консультацій,вивчення результатів моніторин-гових досліджень МВФ та іншихзаходів; 2) концентрація ресурсівМВФ на стратегічних напрямахреалізації національної політики;3) якісний аналіз проектної доку-ментації задля визначення доціль-ності залучення вказаних фінансо-вих ресурсів.in the paper. It is noted that Ukraine’scooperation with these internationalfinancial organizations is carried outin two main areas: 1) development ofinternational legal finance regulationsand advisory and technical support tofacilitate their adoption in the nationallegislation; 2) financing (contractingof loans, debt restructuring, loanguarantee, etc.).The particularities of cooperationbetween Ukraine and the IMF from1992 to 2021 are analyzed in theresearch. The financial and “nonfinancial”forms of cooperationwith the IMF are considered aswell as types of financing programsprovided by the Fund and fulfilmentby Ukraine commitments to IMF atdifferent stages of cooperation. TheFund provides technical assistance(not financial) in the areas ofmacroeconomic policy, monetarypolicy, expenditure management, taxpolicy, on ensuring the stability of thefinancial sector and other ones.The following areas of improvingthe effectiveness of cooperation withthe IMF have been outlined: 1) to useto full advantage the IMF’s potentialto promote the country’s developmentthrough consultations and analysis ofthe results of IMF monitoring studiesand other actions; 2) concentrationof IMF’s resources on implementationof strategic directions in nationalpolicy; 3) a qualitative analysis ofproject documentation to determinereasonableness of attracting thesefinancial resources.

What are the Challenges to the Insolvency Law in the 21st Century?

The paper is an essay about possible ways of further development of the insolvency law. If the law is expected to meet global current social needs, then the law will be subject to significant changes, along with the changing world. The digital revolution is also ahead of the insolvency law. It is difficult to anticipate all possible directions of changes; however, there are some areas where remarkable amendments will have to take place. The paper starts with a short description of the development of the insolvency law over ages. It is an introduction to the problem of possible changes in axiological assumptions of the law on insolvency in the 21st Century. The insolvency law is going to be changed due to the technological revolution in the 21st Century. In this respect, there are mentioned the idea of prediction of insolvency and the problem of the debtor’s assets in the virtual world. Finally, the paper deals with the state debt restructuring under the conventions on external state debt.

NON-PERFORMING ASSETS OF BANKING SECTOR IN INDIA

Priority sector lending, non-priority sector lending, corporate debt restructuring and accumulation of non- performing assets have now become an interesting topic of discussion and debate. Evolution of priority sector credit since social control of banks back in 1967 has a chequered history till emergence of micro finance as a tool of poverty alleviation. Various committees formed by RBI and the Government of India have reviewed progress of priority sector lending and recommended measures for revamping the structural and operational measures related to social banking. On the other side, non-priority sector NPAs and corporate debt restructuring seems to be alarming nowadays. Till the year 2011 the situation was different, but after 2011 with the implication of BASEL II, banks are bound to show their stressed assets and restructuring measures are in full swing. In 2015 the corporate debt restructuring was highest in last 10 years. With the introduction of financial sector reforms and adoption of prudential accounting norms following BASEL convention, the banks have been passing through tremendous crisis with phenomenal growth of nonperforming assets. This paper analyses the growth of priority sector non-performing assets, non-priority sector non-performing assets and its contribution towards building up total non-performing assets and investigates the relationship of non-performing assets with some economic parameters. It also analyses the association of corporate debt restructuring with non-performing assets and tries to find out relationship of the above two. A strong correlation is found between corporate debt restructuring and NPAs. A negative association is found between NPAs and GDP growth.

Ethiopian conflict may intensify rather than ease

Significance Although Demeke also referenced the possibility of resolving Ethiopia’s conflicts through a national dialogue, the government’s wider rhetoric and military build-up instead signal a likely intensification of the conflict over the near term. Impacts The humanitarian situation will deteriorate further, with famine likely in Tigray and parts of northern Amhara. The economy will continue to face tremendous pressure from high inflation, forex shortages and debt restructuring challenges. The ruling party may try to bring some opposition figures into national and regional governments in a nod to inclusivity.