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Law and Policy Reform at the Asian Development Bank 2000 -- Volume II

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This second volume comprises a major study on secured transactions law reform based on the findings of ADB's regional technical assistance (RETA No. 5773-REG) studying the People's Republic of China, India, Pakistan, Thailand and Indonesia. It discusses how such reform can significantly improve widespread access to credit for borrowers through use of movables like equipment, livestock and inventories as well as receivables.

In addition to the intrinsic value of such law reform for the credit markets, it also complements effective insolvency regimes by providing a debt collection framework for enterprises prior to insolvency, thereby reducing the magnitude of insolvency debt. Finally, an effective secured transactions law regime also promotes good corporate governance that may prevent insolvency.

RELATED DOCUMENTS

Law and Policy Reform at the Asian Development Bank, 2005 Law and Policy Reform at the Asian Development Bank. 2003 Law and Policy Reform at the Asian Development Bank, 2002 Law and Development at the Asian Development Bank, 2001 Law and Policy Reform at the Asian Development Bank, 2000, Vol. 1 Law and Development at the Asian Development Bank, 1999

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Contents

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Table of Contents, Foreword, Preface and Executive Summary [ PDF: 105kb | 17 pages ]

I. Introduction [ PDF: 18kb | 2 pages ]

II. Secured Credit [ PDF: 31kb | 4 pages ]

• What is Secured Credit
• Parties to a Secured Transaction
• Types of Secured Transactions
• Movable Property

III. The Importance of Secured Credit [ PDF: 73kb | 10 pages ]

• Collateral Matters to Debtors and Creditors
• Movable Property Plays a Major and Growing Role in the Economy
• Improving the Framework for Secured Transactions Generates
• Economic Gains

IV. The Policy Questions in Designing Legal Frameworks for Secured Transactions [ PDF: 39kb | 6 pages ]

• The Questions for Policy Makers
• Solutions to These Policy Questions
• Problems Encountered and Generated by the Solutions
• Methodology

V. Problems Relating to Creation of Security Interests [ PDF: 152kb | 20 pages ]

• Limited and Fragmented Systems for Security Interests
• Limits to the General Description of Collateral
• Limits on Property that May Serve as Collateral: Fixtures
• Limits on Who May Provide or Obtain Credit Using Collateral
• Limits to Security Interests that Secure Future Advances
• Limits to the Right to Follow Collateral and Continue an Interest in the Proceeds of Collateral
• Economic Consequences of Problems Creating Security Interests

VI. Problems in Setting Priorities for Security Interests [ PDF: 82kb | 10 pages ]

• Timing of Priority
• Priority over Other Secured Creditors
• Priority over the Buyer of the Collateral
• Priority over Other Claimants in Bankruptcy
• Summary

VII. Problems in Publicizing Security Interests [ PDF: 202kb | 15 pages ]

• Divided Registration Systems
• Uncertain Reliability of Registered Information
• Limited Access to Filing
• Limited Access by the Public to Data About Registered Security Interests
• Cost and Speed of the Registries
• Economic Consequences of Problems in Publicity

VIII. Problems in Enforcing Security Interests [ PDF: 326kb | 31 pages ]

• Self Help: Repossession or Seizure of Collateral by a Creditor Without Breach of Peace or Court Order
• Use of Courts to Possess or Seize Collateral
• Disposing of the Collateral: Sale and Use by the Secured Creditor
• Claims Competing Against Those of a Secured Creditor
• Banks' Special Procedures to Seize Collateral
• Arbitration as an Alternative to Enforcement Through the Courts
• Court Review of Hybrid Security Interests: Rescission of Financial Leases
• Criminal Procedures to Enforce Security Interests: Debt Imprisonment
• Economic Consequences of Enforcement Problems

IX. How Problems in Securing Transactions With Movable Property Hurt Creditors and Debtors [ PDF: 132kb | 22 pages ]

• The Enterprise Interviews
• Suppliers' Credit and Debt: Merchants, Traders, Dealers, Manufacturers
• Credit by Intermediaries: The Financial Firms
• Problems with the Law Explain the Creditors' Behavior

X. Options for Reform [ PDF: 118kb | 19 pages ]

• Options That Have Not Succeeded
• Options to Reform the Secured Transactions Regime
• Substantive Issues for Secured Transactions Regimes
• Conclusion: Steps in a Reform

Endnotes [ PDF: 27kb | 5 pages ]

Glossary [ PDF: 32kb | 6 pages ]