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World Bank Group President David Malpass remarked that early in the pandemic, the World Bank Group set out to use aggressive financial programming and leverage to increase commitments as rapidly as possible. The World Bank group used a number of powerful financial programming and leveraging techniques toward that goal. He highlighted recent capital increases, aggressive leveraging through bond issuance by IBRD, IDA and IFC, as well as MIGA reinsurance, and private sector mobilization, the combined WBG has been able to provide support to low- and middle-income countries over the last fifteen months. This financing is based on world-class knowledge work, and deep country relationships and know-how in our country teams present on the ground around the world. The World Bank Group strongly supports leveraging donor resources to maximize commitments, respond to emergencies, and prepare for crises. The World Bank Group provides grants to countries that are most in need, including fragile and small states and are investing heavily in social safety nets and digital cash transfer programs. Data sharing by both debtors and creditors enables debt reconciliation, a key for the debt restructuring process and he called on the G20 members to share their lending data and assist in the reconciliation exercise. The Group is actively implementing the Sustainable Development Finance Policy under IDA19 and will continue it in IDA20. The Group continues to strongly and actively support the implementation of the Common Framework, working closely with partners.

Debt Markets --- Debt Restructuring --- Finance and Financial Sector Development --- Governance --- International Governmental Organizations --- Social Safety Nets

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Debt relief --- -Debt relief --- Debt renegotiation --- Debt rescheduling --- Debt restructuring --- Relief, Debt --- Renegotiation, Debt --- Rescheduling, Debt --- Restructuring, Debt --- Debtor and creditor --- Law and legislation

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This paper takes a hard look at the experience with official intervention in sovereign debt crises, focusing on debt crises of the 1980s, Russia in 1998, Argentina in 2001, and Greece in 2010. Based on the track record, the authors argue that in situations where countries face a solvency problem, official intervention is more likely to succeed if official money is lent at the risk-free rate reflecting its seniority and private creditors receive an upfront haircut. Such an approach would limit the costs associated with procrastination and increase the chances of success by enabling a more realistic fiscal program to restore solvency. They examine the moral hazard implications for debtor countries of this proposal and find that these are unlikely to be severe. In fact, after their crises of 1997-2001, emerging market countries embarked on an aggressive and comprehensive program of self-insurance, indicating that they are weary of debt crises and their costs. However, the prospect of an upfront haircut for private creditors in the event of insolvency is likely to make them more diligent in their sovereign lending decisions.

Access to Finance --- Bankruptcy and Resolution of Financial Distress --- Debt Markets --- Debt Restructuring --- Emerging Markets --- External Debt --- Liquidity --- Macroeconomics and Economic Growth --- Poverty Reduction --- Seniority --- Solvency --- Sovereign Debt

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Local government finance has taken on increasing importance in Turkey, with the evolving fiscal decentralization and the growing role of local administrations in public investment. The focus of this policy note is on sub-national borrowing as an essential component of the framework for sustainable sub-national finance. Sound management of sub-national borrowing is important for ensuring debt sustainability. Past problems with fiscal deficits by local administrations in Turkey have led to two major debt restructurings. The Government has undertaken many laudable improvements in the system of fiscal management and control of local administrations in recent years, in particular by regulating the procedures for borrowing, raising the requirements for accounting and reporting, and tightening the terms for Treasury guarantees of foreign borrowing. The rest of the policy note is organized as follows. The next section summarizes the framework for sub-national borrowing in Turkey and reviews areas for further development, including in particular, an effective insolvency mechanism. Section three presents rationales for a sub-national insolvency mechanism and describes how the entry points for reform have contributed to varying modalities across countries. Section four discusses key design issues for a sub-national insolvency mechanism, driven by the fundamental difference between public and private insolvency. Final section five presents possible medium-term reform options for Turkey.

Bankruptcy and Resolution of Financial Distress --- Debt --- Debt Markets --- Debt Restructuring --- Finance and Financial Sector Development --- Financial Crisis Management & Restructuring --- Financial Regulation & Supervision --- Insolvency --- Public & Municipal Finance

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This paper provides an overview of key elements of Corporate Bankruptcy Codes and Practice around the world that are relevant to the debate on Sovereign Debt Restructuring. It highlights four components common to most bankruptcy reorganization institutions: a stay on debt collection efforts to prevent a costly run for the assets, broad enforcement of absolute priority, majority voting among creditors on the proposed reorganization plan, and new higher priority financing to keep the firm going while its liabilities are restructured. The paper argues that these components ought to be present in any sovereign debt restructuring procedure.

Corporate Finance --- Financial Risk Management --- Investments: Bonds --- International Lending and Debt Problems --- Debt --- Debt Management --- Sovereign Debt --- Financial Crises --- Bankruptcy --- Liquidation --- General Financial Markets: General (includes Measurement and Data) --- Finance --- Economic & financial crises & disasters --- Investment & securities --- Sovereign debt restructuring --- Debt restructuring --- Financial crises --- Corporate insolvency --- Bonds --- Asset and liability management --- Financial institutions --- Debts, External --- United States