Eumedion in favour of targeted European harmonisation of insolvency law
News · 25-03-2021
Eumedion believes that targeted harmonisation
of certain definitions and procedures would help investors better manage legal
risks of their cross-border exposures. This is the view of Eumedion in its response to the Eurpean Commission's consultation on the convergence of insolvency law of EU Member
States that was submitted today.
2020, the European Commission published a consultation document on the
convergence of insolvency law. Eumedion is of the opinion that discrepancies between
the Member States'
insolvency laws may create barriers to the free movement of capital in the
internal market. In its response Eumedion refers to the diverging time-limits, lengths
of procedures as well as diverging overall procedural efficiency. This may make
it more difficult to anticipate the outcome for value recovery, making it
harder to price risks, including for debt instruments. Eumedion points out that
generally the longer restructuring processes take, the more value is destructed
for investors. In its response Eumedion endorses the remark in the Final Report of the
High Level Forum on the Capital Markets Union that targeted harmonisation of
certain definitions and procedures would help investors better manage legal
risks of their cross-border exposures.