The World Bank and the United Nations Commission on International Trade Law (UNCITRAL), in consultation with the International Monetary Fund (IMF), designed the Insolvency and Creditor Rights Standard (the ICR Standard) to represent the international consensus on best practices for evaluating and strengthening national insolvency and creditor rights systems. The ICR Standard is comprised of the World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes (the Principles) and the UNCITRAL Legislative Guide on Insolvency Law (the Legislative Guide). The Financial Stability Board has designated the ICR Standard as one of the key standards for sound financial systems and recommends its implementation according to country-specific circumstances.
Download: World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes (Revised, 2021)
The World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes
The WB Principles were originally developed in 2001 in response to a request from the international community in the wake of the financial crisis of the late 1990s. They were the first internationally recognized benchmarks for assessing the effectiveness of domestic creditor/debtor rights and insolvency systems.
Based on the practical experience gained from using the WB Principles, and following extensive consultations, the Principles have been revised in 2005, 2011, 2015 and 2021 in coordination with the ICR Task Force.
- The 2005 revisions grouped the principles under relevant headings for improved organization and readability.
- The 2011 revisions reflected updates to the UNCITRAL Legislative Guide on Insolvency Law related to the insolvency of enterprise groups. Two new Principles (C16 and C17) were added.
- In 2015, changes were made to Parts A and B of the WB Principles, which highlight the relationship between the cost and flow of credit (including secured credit) and the laws and institutions that recognize and enforce credit agreements. Sections A4 and A5, which previously dealt with Registries and Enforcement mechanisms, were addressed in a more detailed manner. Similarly, Section B2 of the WB Principles received a much-anticipated change which widened the scope of duties and responsibilities of the directors in an insolvency.
- In 2021, changes were introduced to address the insolvency of Micro and Small Enterprises (MSEs) in the ICR Principles, by adding specific guidance and core concepts that any effective MSE insolvency regime should ideally incorporate. These are reflected in Principles C18, C19 and C20.