Virus credit crunch risks turning firms into zombie army
Published 2 mins ago on March 15, 2020
By Agence France-Presse
A decade of easy money sloshing around the economy may come to haunt policymakers as legions of firms hooked on cheap credit have no buffers to make it through the coronavirus crisis without serious damage, or outright failure.
Amid signs that banks and investors have already retrenched their lending, central banks are trying to ensure that the flow of credit to businesses remains open.
But those loans, however soft, will still have to be paid back, and therein lies the rub as many won’t be able to generate the necessary revenue.
The volume of corporate debt struck an all-time real term dollar high of $13.5 trillion at the end of last year, according to the OECD.
https://www.rawstory.com/2020/03/virus-credit-crunch-risks-turning-firms-into-zombie-army/
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