DOCSLIB.ORG

Towards a Common Operational European Definition of Over-Indebtedness

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Towards a Common Operational European Definition of Over-Indebtedness TOWARDS A COMMON OPERATIONAL EUROPEAN DEFINITION OF OVER-INDEBTEDNESS European Commission Directorate-General for Employment, Social Affairs and Equal Opportunities Unit E2 Manuscript completed in February 2008 European Commission This report was financed by and prepared for the use of the European Commission, Directorate-General for Employment, Social Affairs and Equal Opportunities. It does not necessarily represent the Commission's official position. http://Ec.europa.eu/employment_social/spsi Contractor: OEE Etudes www.oee.fr Experts: Didier DAVYDOFF, Grégoire NAACKE and Elodie DESSART OBSERVATOIRE DE L’EPARGNE EUROPEENE (PARIS, FRANCE) Nicola JENTZSCH, Filipa FIGUEIRA, Marc ROTHEMUND and Wolf MUELLER CENTRE FOR EUROPEAN POLICY STUDIES (BRUSSELS, BELGIUM) Elaine KEMPSON, Adele ATKINSON and Andrea FINNEY UNIVERSITY OF BRISTOL, PERSONAL FINANCE RESEARCH CENTRE (BRISTOL, UNITED KINGDOM) If you are interested in receiving the electronic newsletter "ESmail" from the European Commission's Directorate-General for Employment, Social Affairs and Equal Opportunities, please send an e-mail to [email protected] — The newsletter is published on a regular basis in English, French and German. © European Communities, 2008 Reproduction is authorised provided the source is acknowledged. Towards a common operational European definition of over-indebtedness CEPS-OEE-PFRC THE AUTHORS OBSERVATOIRE DE L’EPARGNE EUROPEENE (PARIS, FRANCE) The European Savings Institute (Observatoire de l’Epargne Européenne, OEE) was created in 1999 with two goals: information and data collection on credit and savings and to encourage research that contributes to the public debate. OEE consists of financial institutions, professional associations and public institutions based in Europe. The OEE has in the past worked for the European Commission, the European Parliament and the European Central Bank. The team at the OEE included Didier Davydoff, Elodie Dessart and Grégoire Naacke. The OEE was the project leader and was in charge of the database and the handbook attached to the present report. CENTRE FOR EUROPEAN POLICY STUDIES (BRUSSELS, BELGIUM) The CEPS is a leading Policy Studies institution in Europe. It is situated in the nexus between academia, business and the public sector. It performs independent analysis of European policy matters and has a proven track record in conducting studies for the European Union. CEPS has two subsidiaries, the European Capital Markets Institute (ECMI) and the European Credit Research Institute (ECRI). In the past, CEPS has provided research to several international and national governmental institutions such as European Commission and World Bank. The research team at CEPS included Dr. Nicola Jentzsch, Filipa Figueira, Marc Rothemund and Wolf Mueller. CEPS wrote the third chapter entitled: “Definition and measurement of over-indebtedness”. UNIVERSITY OF BRISTOL PERSONAL FINANCE RESEARCH CENTRE (BRISTOL, UNITED KINGDOM) The Personal Finance Research Centre (PFRC) was established in 1998 by Professor Elaine Kempson, following re-location of the research programme from the independent Policy Studies Institute. Based within the University of Bristol, PFRC has gained a national and international reputation for high-quality policy-focused research encompassing all areas of personal finance. It is well-known in the UK for its work on over-indebtedness, beginning with the first study of credit use and financial difficulties in 1992. PFRC has considerable expertise in designing, undertaking and analyzing both large scale quantitative and in-depth qualitative research. It has conducted research for government departments, trade associations, regulatory bodies, charities and the private sector. The research team at PFRC included Professor Elaine Kempson, Adele Atkinson and Andrea Finney. PFRC wrote the second chapter entitled “Nature and causes of over-indebtedness: a review of literature” with the support of Luisa Anderloni (University of Milan) and the fourth chapter entitled: “Policy responses to over-indebtedness: A review across Europe” 1 Towards a common operational European definition of over-indebtedness CEPS-OEE-PFRC This research project was conducted in close cooperation with the European Commission (Directorate-General for Employment, Social Affairs and Equal Opportunities) representatives. It is impossible to cite all individuals who provided us with assistance across Europe. We are especially grateful to participants and speakers in the conference organised on 11 December 2007 by the European Commission in Brussels, where a preliminary version of this study was discussed. Many of their suggestions were incorporated in the final version of the present report. The report is based upon detailed information provided to us by country experts in 19 European countries. Country experts Country Correspondent Organization Austria Nicola Jentzsch CEPS/ECRI Belgium Didier Noël and Observatoire du Crédit et de l’Endettement Frédéreic Rottier Czech Republic David Smejkal Consumer Defence Association Finland Johanna Leskinen National Consumer Research Center France Georges Gloukoviezoff Université Lyon 2 Germany Nicola Jentzsch CEPS/ECRI Greece Melina Mouzouraki Greek Consumer Association Ireland Caroline Corr Combat Poverty Agency Italy Luisa Anderloni Univerity of Milan Lithuania Dalia Kaupelyte Vytautas Magnus University in Kaunas Luxemburg Didier Noël and Observatoire du Crédit et de l’Endettement Frédéreic Rottier Netherlands Didier Noël and Observatoire du Crédit et de l’Endettement Frédéreic Rottier Poland Dr. Błażej Lepczyński Gdańsk Institute for Market Economics Portugal Teresa Ferreira The Observatory of Consumers' Indebtedness (OEC) Spain Luisa Anderloni University of Milan Sweden Richard Alström Mid Sweden University UK Elaine Kempson University of Bristol Norway Christian Poppe National Institute for Consumer Research Bulgaria Bogomil Nikolov Bulgarian National Consumers Association 2 Towards a common operational European definition of over-indebtedness CEPS-OEE-PFRC Contents 1 Introduction 5 2 Nature and causes of over-indebtedness: A review of the literature 7 2.1 Introduction__________________________________________________________________7 2.2 Levels of over-indebtedness in Europe ____________________________________________8 2.2.1 Family type and number of children ____________________________________ 12 2.2.2 Income ___________________________________________________________ 16 2.2.3 Employment status__________________________________________________ 17 2.2.4 Housing tenure _____________________________________________________ 18 2.2.5 Other factors_______________________________________________________ 19 2.3 The impact of aspects of money management _____________________________________20 2.3.1 Approaches to paying bills and budgeting ________________________________ 20 2.3.2 Unsecured credit commitments ________________________________________ 21 2.3.3 Savings___________________________________________________________ 21 2.3.4 Spending and consumerism ___________________________________________ 22 2.4 Possible causes of over-indebtedness_____________________________________________22 2.4.1 Overview of causes _________________________________________________ 23 2.4.2 Loss of income_____________________________________________________ 23 2.4.3 Low income _______________________________________________________ 24 2.4.4 Money management_________________________________________________ 25 2.4.5 Over-commitment and over-spending ___________________________________ 26 2.4.6 Complex causes ____________________________________________________ 27 References________________________________________________________________________29 3 Definitions and Measurements of Over-indebtedness 33 3.1 Definitions reviewed __________________________________________________________33 3.1.1 Definitions at the European level _______________________________________ 33 3.1.2 Definitions at the national level ________________________________________ 34 3.1.3 Common elements of reviewed definitions _______________________________ 37 3.2 Measurements and indicators reviewed __________________________________________38 3.2.1 Measurements and indicators available at the European level _________________ 40 3.2.2 Measurements and indicators available at national level _____________________ 42 3.2.3 Existing indices in Europe ____________________________________________ 45 3.2.4 Conclusions _______________________________________________________ 46 3.3 Potential over-indebtedness measurements _______________________________________47 3.3.1 Ways to measure over-indebtedness ____________________________________ 47 3.3.2 Measurement of over indebtedness in previous research _____________________ 48 3.4 Developing a common method of measurement____________________________________50 3.4.1 Data available from the EU SILC survey_________________________________ 50 3.4.2 Suggested indicators for a measurement of over-indebtedness ________________ 55 3.4.3 Shortcomings with the associated approach_______________________________ 56 References________________________________________________________________________57 3 Towards a common operational European definition of over-indebtedness CEPS-OEE-PFRC 4 Policy responses to over-indebtedness: A review across Europe 58 4.1 Introduction_________________________________________________________________58 4.1.1 Linking causes and solutions __________________________________________ 59 4.1.2 The building blocks
Load more

Recommended publications
  • What Happens to Microfinance Clients Who Default?
    What Happens to Microfinance Clients who Default? An Exploratory Study of Microfinance Practices January 2015 LEAD AUTHOR Jami Solli Keeping clients first in microfinance CONTRIBUTORS Laura Galindo, Alex Rizzi, Elisabeth Rhyne, and Nadia van de Walle Preface 4 Introduction 6 What are the responsibilities of providers? 6 1. Research Methods 8 2. Questions Examined and Structure of Country Case Studies 10 Country Selection and Comparisons 11 Peru 12 India 18 Uganda 25 3. Cross-Country Findings & Recommendations 31 The Influence of Market Infrastructure on Provider Behavior 31 Findings: Issues for Discussion 32 Problems with Loan Contracts 32 Flexibility towards Distressed Clients 32 Inappropriate Seizure of Collateral 33 Use of Third Parties in Collections 34 Lack of Rehabilitation 35 4. Recommendations for Collective Action 36 ANNEX 1. Summary of Responses from Online Survey on Default Management 38 ANNEX 2. Questions Used in Interviews with MFIs 39 ANNEX 3. Default Mediation Examples to Draw From 42 2 THE SMART CAMPAIGN Acknowledgments Acronyms We sincerely thank the 44 microfinance institutions across Peru, AMFIU Association of Microfinance India, and Uganda that spoke with us but which we cannot name Institutions of Uganda specifically. Below are the non-MFIs who participated in the study ASPEC Asociacion Peruana de as well as those country experts who shared their knowledge Consumidores y Usuarios and expertise in the review of early drafts of the paper. BOU Bank of Uganda Accion India Team High Mark India MFIN Microfinance Institutions
    [Show full text]
  • Workshop on Debt, Finance and Emerging Issues in Financial Integration
    Workshop on Debt, Finance and Emerging Issues in Financial Integration Financing for Development Office (FFD), DESA 8 and 9 April 2008 Clubbing in Paris: Is Debt Sustainability an Illusion? Benu Schneider - 1 - Table of Contents I. Introduction ............................................................................................................................. 1 II. Historical background of the present debate. .......................................................................... 3 III. The changing role of the Paris Club. ....................................................................................... 5 IV. The relationship between the IMF and the Paris Club ............................................................ 6 IV.1 IMF as gatekeeper. ....................................................................................................... 7 IV.2 Over optimistic forecasts.............................................................................................. 8 IV.3 Debt relief and burgeoning conditionality.................................................................... 9 IV.4 Assessment of Debt Sustainability............................................................................. 11 IV.4.1 Frameworks for low income countries.................................................................... 11 IV.4.2 Framework for middle income countries. ............................................................... 13 V. Issues in Paris Club debt resturcturing. ................................................................................
    [Show full text]
  • Unfinished Business in the International Dialogue on Debt
    CEPAL REVIEW 81 65 Unfinished business in the international dialogue on debt Barry Herman Chief, Policy Analysis and Development, From November 2001 to April 2003, the International Financing for Development Office, Monetary Fund grappled with a radical proposal, the Department of Economic Sovereign Debt Restructuring Mechanism, for handling the and Social Affairs, United Nations external debt of insolvent governments of developing and [email protected] transition economies. That proposal was rejected, but new “collective action clauses” that address some of the difficulties in restructuring bond debt are being introduced. In addition, IMF is developing a pragmatic and eclectic approach to assessing debt sustainability that can be useful to governments and creditors. However, many of the problems in restructuring sovereign debt remain and this paper suggests both specific reforms and modalities for considering them. DECEMBER 2003 66 CEPAL REVIEW 81 • DECEMBER 2003 I Introduction A new sense of calm descended on the international international financial markets and government issuers markets for emerging-economy debt in mid-2003. The alike have accepted them. They address certain concerns calm was seen in rising international market prices of about how the external bond debt of crisis countries is sovereign bonds of emerging economies in the first half restructured, although some market participants of the year and good sales of new bond issues, in discount the likelihood that those concerns were any particular those of Brazil and Mexico, as well as the more than theoretical difficulties. This paper will argue successful completion of Uruguay’s bond exchange that the changes that were adopted leave unresolved offer.
    [Show full text]
  • Solutions for Developing-Country External Debt: Insolvency Or Forgiveness
    Law and Business Review of the Americas Volume 13 Number 4 Article 6 2007 Solutions for Developing-Country External Debt: Insolvency or Forgiveness Agasha Mugasha Follow this and additional works at: https://scholar.smu.edu/lbra Recommended Citation Agasha Mugasha, Solutions for Developing-Country External Debt: Insolvency or Forgiveness, 13 LAW & BUS. REV. AM. 859 (2007) https://scholar.smu.edu/lbra/vol13/iss4/6 This Article is brought to you for free and open access by the Law Journals at SMU Scholar. It has been accepted for inclusion in Law and Business Review of the Americas by an authorized administrator of SMU Scholar. For more information, please visit http://digitalrepository.smu.edu. SOLUTIONS FOR DEVELOPING-COUNTRY EXTERNAL DEBT: INSOLVENCY OR FORGIVENESS? Agasha Mugasha* The rich rule over the poor, and the borrower is servant to the lender. Proverbs 22:71 I. INTRODUCTION EVELOPING-country external debt is an economic, social, and political issue. The debt weighs heavily on the shoulders of the debtor nations, crippling their domestic social and economic pro- grams, as well as preventing them from participating effectively in inter- national activities such as trade. Individuals and families in these countries are deprived of even the most basic elements of living. The debt problem also affects the rich/creditor nations as developing coun- tries with stagnating or crippled economies cannot be effective trading partners. Furthermore, the social and economic strife caused by the crip- pling debt has a domino knock-down effect on the richer nations. 2 The debt problem has been around continuously for over thirty years.
    [Show full text]
  • Debt Rescheduling in Comparative Perspective
    “Debt Rescheduling in Comparative Perspective,” October 1998, paper prepared for the World Bank for use in the World Bank Publication Global Economic Prospects and The Developing Countries, 19998/9 ((Washington D.C.: World Bank). DEBT RESCHEDULING IN COMPARATIVE PERSPECTIVE Vinod K. Aggarwal Berkeley APEC Study Center 802 Barrows Hall, #1970 University of California Berkeley, California 94720-1970 Tel.: 510-642-2817 Fax: 510-643-1746 Email: [email protected] OCTOBER 1998 Paper prepared for presentation at a World conference on “Capital Flows in Crisis,” Washington, D.C., October 27-28, 1998, sponsored by the Reinventing Bretton Woods Committee. I am grateful to Mike Hunzeker, Moonhawk Kim, and Brandon Loew for valuable research assistance. The Asian crisis, while affecting many countries in the region, is clearly a misnomer. The reasons behind the current crises in several of the affected countries differ greatly, and the policy approaches followed by these countries have similarly varied. This paper examines two Asian countries, Indonesia and South Korea, as well as the case of Russia, to analyze how efforts to cope with debt problems have evolved. The range of outcomes to this point is very large: Russia is currently in default and in the midst of negotiations, Indonesia has completed several agreements on its debt, while South Korea appears to be the furthest along in recovering following an agreement with commercial banks in January 1998. By focusing on the conduct of debt-related discussions in these countries, and comparing the developments we have seen to previous debt rescheduling attempts, I hope to shed light on the factors influencing the variety we have seen in negotiations.
    [Show full text]
  • Debt and DMFAS GLOSSARY
    CONFÉRENCE DES NATIONS UNIES UNITED NATIONS CONFERENCE SUR LE COMMERCE ET LE DÉVELOPPEMENT ON TRADE AND DEVELOPMENT July 2000 DEBT MANAGEMENT AND FINANCIAL ANALYSIS SYSTEM Debt and DMFAS GLOSSARY UNCTAD/GID/DMFAS/Misc.3/Rev.3 ACCELERATION CLAUSE A clause in a loan agreement which requires the borrower to pay part or all of the balance sooner than the date specified for payment when a given event, specified in the acceleration clause, occurs. See acceleration of maturity. ACCELERATION OF MATURITY Declaration by a lender that the outstanding principal is due and payable immediately, together with the interest due, following non-compliance with loan covenants. See acceleration clause. ACCOUNTANT The unit that records into the accounts a disbursement or a payment order that it has received from the system. For other than direct payments, this unit forwards the payment order to the "cashier". If the cashier makes the payment, the payment order is returned with an accompanying payment voucher. If the payment was not made, only the payment order is returned. Finally the accountant notifies the system of what has happened by returning the payment order and a possible payment voucher (now including, for instance, effected currency, exchange rates used, etc.). See cashier, payment order and effected currency. ACCOUNTANT REPLY DATE The date of the accountant's reply to a payment order. ACCOUNTING UNIT Synonymous for "accountant". See accountant. ACCRUED INTEREST In the DMFAS, accrued interest is the interest that has accumulated between the date of application of the interest rate and a date fixed by the user. For example, if the interest rate application date is 1/11/1999 and the payment date 1/04/2000, the user might be willing to know the amount of accrued interest between 1/11/1999 and 31/12/1999.
    [Show full text]
  • Disclosure SEI Target Date Collective Trust
    SEI Target Date Collective Trust Disclosure Memorandum Effective April 1, 2008 – As Amended February 14, 2020 THIS OFFERING IS BEING MADE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, FOR AN INTEREST IN A COLLECTIVE INVESTMENT TRUST FOR EMPLOYEE BENEFIT TRUSTS. NO PUBLIC MARKET WILL DEVELOP FOR THE UNITS OF PARTICIPATION IN THE TRUST. THE UNITS ARE NOT TRANSFERABLE OR REDEEMABLE EXCEPT UPON SATISFACTION OF CERTAIN CONDITIONS DESCRIBED UNDER “WITHDRAWALS FROM THE TRUST.” THE UNITS OF PARTICIPATION OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH OR APPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE, NOR HAS ANY SUCH COMMISSION OR REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DISCLOSURE MEMORANDUM. THE TRUST IS NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, IN RELIANCE UPON AN EXEMPTION FROM SUCH REGISTRATION. PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS DISCLOSURE MEMORANDUM AS INVESTMENT, TAX, OR LEGAL ADVICE. THIS DISCLOSURE MEMORANDUM, AS WELL AS THE NATURE OF THE INVESTMENT, SHOULD BE REVIEWED BY EACH PROSPECTIVE INVESTOR WITH ITS INVESTMENT ADVISORS, ACCOUNTANTS OR LEGAL COUNSEL. NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS DISCLOSURE MEMORANDUM, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON. THIS DISCLOSURE MEMORANDUM CONTAINS SUMMARIES, BELIEVED TO BE ACCURATE, OF CERTAIN TERMS OF CERTAIN DOCUMENTS RELATING TO THIS OFFERING, INCLUDING THE DECLARATION OF TRUST. FOR COMPLETE INFORMATION CONCERNING THE RIGHTS AND OBLIGATIONS OF THE PARTIES THERETO, REFERENCE IS HEREBY MADE TO THE ACTUAL DECLARATION OF TRUST, A COPY OF WHICH WILL BE FURNISHED TO PROSPECTIVE INVESTORS, UPON REQUEST, PRIOR TO ACCEPTANCE OF THEIR APPLICATIONS.
    [Show full text]
  • DSSI) Has Enabled a Fast and Coordinated Release of Additional Resources to Beneficiary Countries to Bolster Their Crisis Mitigation Efforts
    DEVELOPMENT COMMITTEE (Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries) DC2020-0007 October 16, 2020 Joint IMF-WBG Staff Note: Implementation and Extension of the Debt Service Suspension Initiative Attached is the document titled “Joint IMF-WBG Staff Note: Implementation and Extension of the Debt Service Suspension Initiative” prepared by the World Bank Group and International Monetary Fund for the virtual October 16, 2020 Development Committee Meeting. IMPLEMENTATION AND EXTENSION OF THE September 28, 2020 DEBT SERVICE SUSPENSION INITIATIVE EXECUTIVE SUMMARY The COVID-19 pandemic is heavily impacting the world’s poorest countries. Economic activity in the poorest countries is expected to drop about 2.8 percent in 2020. The pandemic spread to these countries has lagged contagion in advanced economies and emerging markets, but some countries have seen a rapid surge. Health challenges may rise and containment measures have come at an economic cost. Overall, the crisis could push 100 million people into extreme poverty and raise the global poverty rate for the first time in a generation. The Debt Service Suspension Initiative (DSSI) has enabled a fast and coordinated release of additional resources to beneficiary countries to bolster their crisis mitigation efforts. It was endorsed by the G20 Finance Ministers in April 2020 and became effective on May 1, 2020. As of end-August, 43 countries are benefitting from an estimated US$5 billion in temporary debt service suspension from official bilateral creditors, accounting for more than 75 percent of eligible official bilateral debt service under the DSSI in 2020.
    [Show full text]
  • Lessons Learnt from Experience with Debt-For-Environment Swaps in Economies in Transition
    Environmental Finance Lessons Learnt from Experience with Debt-for-Environment Swaps in Economies in Transition ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation's statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. EAP TASK FORCE The Task Force for the Implementation of the Environmental Action Programme for Central and Eastern Europe (EAP Task Force) was established in 1993 at the “Environment for Europe” Ministerial Conference in Lucerne, Switzerland. Its Secretariat was established at the OECD as part of the Centre for Co-operation with Non-Members.
    [Show full text]
  • Debt Relief and Sustainability1
    CHAPTER 20 Debt relief and sustainability1 Boris Gamarra,* Malvina Pollock,** Dörte Dömeland*** and Carlos A. Primo Braga**** I. Introduction1 the high-level task force on the implementation of the right to development. It is also noteworthy that the At the Millennium Summit in 2000, Heads of Working Group welcomed and encouraged “efforts State and Government undertook “to implement the by donor countries and the international financial enhanced programme of debt relief for the heavily institutions to consider additional ways, including indebted poor countries without further delay and to appropriate debt swap measures, to promote debt agree to cancel all official bilateral debts of those coun- sustainability for both [heavily indebted poor coun- tries in return for their making demonstrable commit- tries (HIPCs)] and non-HIPCs” (E/CN.4/2005/25, ments to poverty reduction” and expressed their deter- para. 54 (a)). Given the importance from the perspec- mination “to deal comprehensively and effectively tive of the right to development of the HIPC Initiative with the debt problems of low- and middle-income and other forms of debt relief, it is useful to examine developing countries, through various national and the history of debt relief and the range of measures international measures designed to make their debt implemented to deal with the issue in the spirit of these sustainable in the long term”.2 This commitment, and policy positions. the corresponding target 8.D of the Millennium Devel- opment Goals (“Deal comprehensively with the debt The machinery for sovereign debt workouts has problems of developing countries”), was addressed been evolving since the United Nations Monetary and by the open-ended Intergovernmental Working Group Financial Conference, held at Bretton Woods, New on the Right to Development, which recognized “that Hampshire in 1944.
    [Show full text]
  • Money Matters Vol. 1, 2007
    Moneyno Matters 1 | 2007 Debt settlement processes Despite positive experiences with existing private bankruptcy proceedings across Europe, many European citizens still wait for the introduction of legal debt settlement processes for private households and individuals to help them cope with their debt problems. « Debt adjustment in Finland and Sweden « Insolvency proceedings in Germany « Amendments to the Dutch Wsnp « Planned reform of the Austrian proceedings « Regulation urgently needed in Poland and Spain debt settlement processes Debt adjustment in Finland Finland has a well-functioning basic Finland was an ‘early bird’ in alleviating debt problems together with some structure to fight debt problems. other countries in western Europe. It has now well-functioning basic structures But although over-indebtedness like debt adjustment legislation and a nation-wide debt counselling network. isn’t any more a hot political topic, Also other legislative and policy reforms have strengthened debtor’s position it has become a permanent since the 1990s. problem in credit society. Anyway, there are some actual challenges in Finland: by Vesa Muttilainen the position of debtors, who have dropped outside the current procedures (rejected debt adjustments etc.) some new phenomena (for example SMS-loans) effects of radical amendments in debt enforcement procedure (final time-limit for debt collection) Background In Finland, the level of relative poverty is about 12%, which is still among the lowest in the EU. However, this number has increased slightly during the 2000s. The rate of unemployment has fallen continuously since 1994 and is now under 8%. Debt problems grew considerably during the economic depression in the early 1990s.
    [Show full text]
  • Report on Legal Solutions to Deb…
    Strasbourg, le 11 October 2005 CDCJ-BU (2005) 11 rev [cdcj-bu/docs2005/cdcj-bu (2005) 11 e rev] BUREAU OF THE EUROPEAN COMMITTEE ON LEGAL CO-OPERATION (CDCJ-BU) REPORT ON LEGAL SOLUTIONS TO DEBT PROBLEMS IN CREDIT SOCIETIES by Johanna Niemi-Kiesiläinen and Ann-Sofie Henrikson Department of Law Umeå University, Sweden 2 TABLE OF CONTENTS Page 1. Introduction ...........................................................................................................................................................4 2. Over indebtedness: Concept, Reasons and Policies ......................................................................................5 2.1 Concept and Scope of Over-indebtedness ...................................................................................................5 2.2 Reasons for and Effects of Over-indebtedness ..........................................................................................8 2.3 Prevention and Rehabilitation ...................................................................................................................11 3. Prevention: Credit Registration and Debt Counselling .................... ........................................................14 3.1 Introduction ...................................................................................................................................................14 3.2 Registration of Default and Credits ............................................................................................................15 3.3 Debt Counselling
    [Show full text]