Post COVID-19 recovery: focus on sustaining viable businesses

Insolvencies have fallen sharply during the pandemic due to extensive government support measures.

The key takeaways of this edition are:

  • Corporate bankruptcies fell sharply in 2020, owning to extensive government support measures.
  • However, bankruptcies are bound to rise above-trend, in particular among SMEs, as the end of the crisis draws nearer, and support measures eventually expire.
  • Governments should target support at companies that are viable in the long run and at the same time allow unproductive companies to restructure.
  • The establishment of "bad banks" or specially designed asset management firms could help alleviate the burden of non-performing loans.

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Economic Insights Post COVID-19 recovery: focus on sustaining viable businesses

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