Waibel, MichaelLiu, Lili2012-03-192012-03-192010-07-01https://hdl.handle.net/10986/3847As a result of worldwide decentralization, subnational debt is rising. Subnational debt crises in major developing countries in the 1990s have led to strengthened regulatory frameworks for subnational borrowing and insolvency. With the fragility of the global recovery and increasing public debt, and the structural trends of decentralization and urbanization, it becomes more important to prudently manage subnational default risks. Although the regulatory frameworks share central features, the historical context and entry points for reform drive variations across countries. Addressing soft budget constraints is integral to the regulatory framework. Ex ante fiscal rules for subnational governments attempt to limit default risks; ex post regulation predictably allocates default risk, while providing breathing space for orderly debt restructuring and fiscal adjustment, as well as the continued delivery of essential public services. The regulatory reforms are inseparable from the reform of broader intergovernmental fiscal systems and financial markets.CC BY 3.0 IGOADJUSTMENT OF DEBTADMINISTRATIVE PROCEDURESARREARSASSETASSETSASSETS FOR DISTRIBUTIONASSETS IN BANKRUPTCYBAILOUTBAILOUTSBALANCE SHEETSBANK LOANSBANKRUPTBANKRUPTCYBANKRUPTCY CODEBANKRUPTCY COURTBANKRUPTCY FILINGSBANKRUPTCY FRAMEWORKBANKRUPTCY MECHANISMSBANKRUPTCY PROCEDURESBANKRUPTCY PROCEEDINGBARGAINING POWERBENEFICIARIESBEST INTERESTS OF CREDITORSBOND MARKETSBONDHOLDERSBORROWERBORROWERSBORROWING CAPACITYBUDGETBUDGET CONSTRAINTBUDGET CONSTRAINTSBUDGET DEFICITBUDGET DEFICITSCAPITAL INVESTMENTCAPITAL INVESTMENTSCAPITAL MARKETCAPITAL MARKETSCAUSE OF INSOLVENCYCHAPTER 13CLAIMSCLASS OF CLAIMSCONTINGENT LIABILITIESCONTINGENT LIABILITYCONTRACT LAWSCONTRACTUAL RIGHTSCORPORATE BANKRUPTCYCORRECTIVE ACTIONSCORRUPTIONCREDITCREDIT CONTRACTCREDIT MARKETCREDIT RATINGCREDIT RATINGSCREDITORCREDITOR CLAIMSCREDITOR RIGHTSCREDITOR RIGHTS SYSTEMSCREDITSCREDITWORTHINESSDEBTDEBT ADJUSTMENT PLANDEBT CRISESDEBT CRISISDEBT FINANCEDEBT FINANCINGDEBT INSTRUMENTDEBT INSTRUMENTSDEBT MANAGEMENTDEBT MARKETDEBT OBLIGATIONSDEBT PAYMENTSDEBT PROBLEMDEBT RELIEFDEBT RESTRUCTURINGDEBT RESTRUCTURING MECHANISMDEBT SERVICEDEBTORDEBTORSDEBTSDECENTRALIZATIONDEFAULTDEFAULT RISKDEFAULT RISKSDEFAULTSDEVELOPING COUNTRIESDISCHARGE OF DEBTEFFECTIVE INSOLVENCYEFFECTIVE INSOLVENCY SYSTEMENFORCEMENTEXCHANGE RATESEXISTING DEBTFINANCIAL ACCOUNTSFINANCIAL CONSTRAINTSFINANCIAL CRISISFINANCIAL DISTRESSFINANCIAL INDICATORSFINANCIAL INSTITUTIONSFINANCIAL MANAGEMENTFINANCIAL MARKETFINANCIAL MARKETSFINANCIAL PROBLEMSFINANCIAL RESOURCESFINANCIAL RISKSFINANCIAL STABILITYFINANCIAL SYSTEMFISCAL DEFICITFISCAL DEFICITSFISCAL DISTRESSFISCAL POLICIESFISCAL POLICYFISCAL REFORMSFOREIGN EXCHANGEFOREIGN EXCHANGE RISKSFRAMEWORK FOR INSOLVENCYGENERAL DEBTGOOD FAITHGOVERNMENT DEFICITGOVERNMENT INSOLVENCYGUARANTEESHARD BUDGETHIGH DEBTIMPLICIT GUARANTEESINDEPENDENT COURTSINDIVIDUAL CREDITORSINFRASTRUCTURE INVESTMENTSINSOLVENCYINSOLVENCY FRAMEWORKINSOLVENCY LAWINSOLVENCY MECHANISMINSOLVENCY MECHANISMSINSOLVENCY PROCEDUREINSOLVENCY PROCEDURESINSOLVENCY PROCEEDINGINSOLVENCY PROCEEDINGSINSOLVENCY SYSTEMINSOLVENCY TRIGGERINSOLVENTINSTITUTIONAL PRINCIPLESINSTITUTIONAL REFORMSINSURANCEINTEREST RATESINTERNATIONAL BANKINVESTMENTINVESTMENTSJUDGMENTJUDICIAL MECHANISMJUDICIAL PROCEDURESJURISDICTIONLEGAL FRAMEWORKLEGAL FRAMEWORKSLENDERLENDERSLENDINGLIQUIDATIONLIQUIDATION OF ASSETSLIQUIDITYLOCAL GOVERNMENTLOCAL GOVERNMENT DEBTLONG-TERM BORROWINGLOSS-MAKINGMAJORITY OF CREDITORSMANDATESMARKET FINANCINGMARKET PARTICIPANTSMISMANAGEMENTMODEL LAWMUNICIPAL BANKRUPTCYMUNICIPAL BANKRUPTCY FRAMEWORKMUNICIPAL CREDITMUNICIPAL CREDIT MARKETMUNICIPAL DEBTMUNICIPAL DEBT ADJUSTMENTMUNICIPAL DEBTORSMUNICIPAL DEFAULTSMUNICIPAL INSOLVENCIESMUNICIPAL INSOLVENCYNEGOTIATIONSNEGOTIATIONS BETWEEN DEBTORNET DEBTOUTSIDE BANKRUPTCYPOVERTYPOWER OF CREDITORSPRIVATE CREDITORSPRIVATE INVESTORSPRIVATE LAWPUBLIC ACCOUNTANTPUBLIC ACCOUNTANTSPUBLIC DEBTPUBLIC DISCLOSURESPUBLIC INVESTMENTREGULATORY FRAMEWORKREGULATORY FRAMEWORKSREGULATORY REFORMSREGULATORY SYSTEMSREMEDIESREORGANIZATIONREORGANIZATION PLANREPAYMENTREPAYMENT OF CREDITORSRESTRUCTURING PLANRESTRUCTURING PROCESSRISK OF INSOLVENCYRISKY DEBTROLE OF COURTSSATISFACTION OF CREDITORSSETTLEMENTSETTLEMENT OF CLAIMSSHARESHORT-TERM BORROWINGSOFT BUDGET CONSTRAINTSSOVEREIGN DEBTSTATE DEBTSTRANSITION ECONOMIESTRANSPARENCY LAWTRUSTEEUNSECURED CREDITORSWAGESWORKOUTSWorld Bank10.1596/1813-9450-5362