Insolvency reform became a prominent policy topic for many Asian economies during and following the Asian financial and economic crisis of the late 1990s. The crisis and other economic factors rendered many corporations insolvent. At this time, the absence of effective, predictable and orderly ways to deal with insolvency was for the first time heavily felt by governments, corporations and creditors. Corporate restructuring and reorganization was necessary on a large scale, but the procedures in place at that time were ineffective and lacking. The existing insolvency procedures also hindered an inflow of necessary investments because creditors, having witnessed the crisis and the lack of proper creditor protection in these jurisdictions, were unforthcoming with new capital.
Against this backdrop rose FAIR. FAIR was created by the Organisation of Economic Co-operation and Development (OECD), the Asia-Pacific Economic Cooperation forum (APEC), the World Bank Group and the Asian Development Bank (ADB), with the support of the public and private sector experts who attended the preceding meeting on Insolvency Systems in Asia: An Efficiency Perspective, organized in Sydney, Australia, in November 1999 by the OECD, the World Bank, the Australian Treasury, the Australian Agency for International Development (AusAID), and APEC.
FAIR contributes to the betterment of insolvency regimes in Asia. In particular, it is committed to:
- Assisting in the development of insolvency regimes that fit local legal systems, cultures, and practices;
- Developing policies and supporting policy makers;
- Working with and educating stakeholder groups like the judiciary, regulators, practitioners, and lenders;
- Monitoring and evaluating policies and reforms as they are implemented;
- Identifying areas of interest relevant to policy makers; and,
- Assisting countries in identifying necessary technical assistance needs.