I have written before that one of my concerns for the coming years is that at some point the support measures that have been introduced to help businesses survive this crisis will have to be removed. One major development will be the re-introduction of covenants on loans to ensure a company that is insolvent cannot borrow any additional funds and lenders have a decent chance of getting their money back. This crisis will inevitably create a number of zombie companies that will be so highly indebted that they will only survive with permanent support from lenders or the government. The worst we can do is keep these zombies alive out of a fear of a spike in bankruptcies.
A slow-motion credit crisis in 2021?
A slow-motion credit crisis in 2021?
A slow-motion credit crisis in 2021?
I have written before that one of my concerns for the coming years is that at some point the support measures that have been introduced to help businesses survive this crisis will have to be removed. One major development will be the re-introduction of covenants on loans to ensure a company that is insolvent cannot borrow any additional funds and lenders have a decent chance of getting their money back. This crisis will inevitably create a number of zombie companies that will be so highly indebted that they will only survive with permanent support from lenders or the government. The worst we can do is keep these zombies alive out of a fear of a spike in bankruptcies.