Credit Today reports "OFT weighs up insolvency regulation" on the Office of Fair Trading study of the corporate insolvency market.

The OFT is considering whether to recommend that the number of Recognised Professional Bodies (regulators) be reduced to 2 or 3 - or even one. A key issue appears to be the encouragement of trust in the profession and transparency.

There is a lack of understanding about insolvency amongst creditors, according to the OFT. I think that is hardly surprising. The profession and the regulators have a lot to do to educate ordinary businesses and consumers. Insolvency is a complex technical and legal subject and not all practitioners are as user-friendly as they might be!

A tentative thought from the OFT is, interestingly, that secured creditor involvement appears to "regulate" IPs outside the formal system. If so, shouldn't banks' panels be expanded to encompass more IPs?

Insolvency practitioners are highly qualified professionals, and they are highly regulated. That they are trustworthy and properly represent creditors' interests should be made self-evident through effective regulation.

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We reported in our earlier blog 'Retail Insolvency News', that the New Year is a time when retail insolvencies tend to come to the fore. 

Some British retailers, hit by poor Christmas trading, may struggle to pay their December rent bills, forcing them into insolvency or a debt restructuring in the New Year.  Experts are predicting that the most likely to run into trouble are 'big ticket' retailers selling discretionary products.  

So noted Credit Today recently.  As one of those whose view they sought I think there are systemic risks and that big-ticket, discretionary-spend retailers are in the front line.

But so far 2008's prominent retail insolvencies have been in shoes (Stead & Simpson and Dolcis), books (The Works) and fashion (Elvi and Base Menswear).

The common thread is undistinguished chains at the low end of the middle market being most  at risk, with the credit crunch affecting future levels of retail spending and spending on non-essential delayable purchases. Differentiation and a nose for fickle customer demand remain the key factors for survival.

The Financial Times observes (here) that the tally of retail failures is lower than it might have been. Restructuring takes longer because of the more complex stakeholder structures found now compared to 5 years ago, and some of the weaker players saw the New Year's problems coming. Together these factors encouraged some retailers to start taking advice and acting early enough to avoid administration.

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