Guest editorial

• DOI: http://doi.org/10.1002/iir.1335
• Author: Irit Mevorach
• Date: 01 March 2019
• Published date: 01 March 2019

EDITORIAL

Guest editorial

Countries around the world constantly strive to improve their restructuring and insolvency

systems to meet new challenges and changing market conditions. Developing economies,

however, are often at more initial stages of building their systems' capacity, in terms of both the

law and the institutions supporting it. In a recentpublication entitled “TheFutureofCross‐Border

Insolvency: Overcoming Biases and ClosingGaps,”

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I argued that it is one of the majortasks of the

international community and international organisations engaged in the insolvency field to

attempt to close capacity gaps in and among legal systems, for the cross‐border insolvency system

(as it applies to both commercial entities and financial institutions) to succeed.

Increasingly, cross‐border insolvency cases reach more countries, and many insolvency cases

involve international elements. The dominant approach for handling such cases is “modified

universalism,”which requires a global perspective over the multinational default. Such

perspective can only be achieved through high level of cooperation among countries—ex ante

in agreeing on cross‐border insolvency frameworks and ex post during the insolvency process

in implementing and complying with agreed frameworks consistently. However, cooperation

can be significantly undermined where there is lack of trust in foreign insolvency systems

and their administration of justice.

Regulatory and capacity constraints also undermine the ability to address complex

insolvencies. Cross‐border insolvency cases may shift from countries perceived to be

incapacitated to other more developed regimes, thereby exacerbating the gaps between systems,

as it might be difficult as a result to develop the expertise needed to be able to handle intricate

cases in the future. Lack of meaningful participation of certain countries in cross‐border

insolvencies also undermines these countries' ability to gain experience and be exposed to

positive peer effect, which could push them to become more “universalist”and fear less to

“surrender”sovereignty.

Emerging economies gradually attempt to close regulatory and capacity gaps and make

themselves readier for increased participation in the global system. This phenomenon often

relies on external assistance of international organisations. Standard‐setting and developing

organisations assist through standardisation and capacity‐building efforts, which can accelerate

development. Indeed, capacity development in the field of commercial law, specifically creditor–

debtor regimes and insolvency, is a far‐reaching effort ultimately aimed at eradicating poverty,

including through increasing access to credit, attracting investment, and promoting growth.

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This is an open access article under the terms of the Creative Commons Attribution‐NonCommercial‐NoDerivs License, which permits

use and distribution in any medium, provided the original work is properly cited, the use is non‐commercial and no modifications or

adaptations are made.

© 2019 The Authors International Insolvency Review published by INSOL International and John Wiley & Sons Ltd

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Oxford University Press, 2018.

Received: 2 July 2017 Accepted: 2 July 2017

DOI: 10.1002/iir.1335

Int Insolv Rev. 2019;28:3–4. wileyonlinelibrary.com/journal/iir 3