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Early Warning Tool Bulgaria : Technical Note (English)

The objective of the technical note (TN) is to assist the Bulgarian authorities in the design of an early warning tool (EWT) to identify and assist debtors in potential financial distress, in line with the recommendations of the European Union (EU) Directive 2019-1023 of the European Parliament and Council on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt. There are some key aspects to consider when implementing an EWT in Bulgaria. To ensure full consistency of a proposed approach towards EWT implementation with the Bulgarian specificities, when discussing how to design an EWT, the TN conceptually analyzes three pillars: (1) the existence and availability of data that should be used by the EWT; (2) the model and algorithm that can indicate companies in distress; and (3) the institutional arrangements surrounding the EWT, including governance of the agency in charge of the EWT’s operations, and the process of notification and support of distressed businesses. In general, given the relatively recent adoption of the EU Directive, there is no established best practice model when it comes to defining data collection, elaboration, modeling, and institutional arrangements to support the EWT. Under this perspective, the lessons learned in each country concerning these topics and the authorities’ vision of the way forward on the EWT in a way that best accommodates debtors’ needs, will be described in the benchmarking report. This will support informed decision-making by the Bulgarian authorities on this subject.




Official version of document (may contain signatures, etc)


World Bank

Early Warning Tool Bulgaria : Technical Note (English). Washington, D.C. : World Bank Group