EU insolvency reform cautiously welcomed

Author: Lizzie Meager | Published: 23 Nov 2016

The EU’s long-awaited proposal for a Europe-wide business insolvency framework was welcomed by the market yesterday - but the task at hand must not be underestimated.

Plans for a more harmonised regime across member states were originally outlined in the action plan for building a capital markets union (CMU) last October.

The final proposal has been widely compared to the US’ chapter 11 procedures.

"The Commission’s proposed directive on insolvency reform is a big step in the capital markets union project, as it addresses the problems caused by divergent national insolvency regulations across Europe," said Simon Lewis, chief executive of the Association for Financial Markets in Europe (Afme).

"Creating a consistent EU insolvency framework will benefit Europe's capital markets and the economy in general by providing greater certainty for market participants, reducing costs for investors, increasing...