Corporate Liquidity And Solvency In Europe During Covid 19 The Role Of Policies

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Corporate Liquidity and Solvency in Europe during COVID-19: The Role of Policies

Mr.Christian H Ebeke,Nemanja Jovanovic,Ms.Laura Valderrama,Jing Zhou
Corporate Liquidity and Solvency in Europe during COVID 19 The Role of Policies Book PDF

Author : Mr.Christian H Ebeke,Nemanja Jovanovic,Ms.Laura Valderrama,Jing Zhou
Publisher : International Monetary Fund
Page : 48 pages
File Size : 55,5 Mb
Release : 2021-03-02
Category : Business & Economics
ISBN : 9781513570914

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Corporate Liquidity and Solvency in Europe during COVID-19: The Role of Policies by Mr.Christian H Ebeke,Nemanja Jovanovic,Ms.Laura Valderrama,Jing Zhou Pdf

The spread of COVID-19, containment measures, and general uncertainty led to a sharp reduction in activity in the first half of 2020. Europe was hit particularly hard—the economic contraction in 2020 is estimated to have been among the largest in the world—with potentially severe repercussions on its nonfinancial corporations. A wave of corporate bankruptcies would generate mass unemployment, and a loss of productive capacity and firm-specific human capital. With many SMEs in Europe relying primarily on the banking sector for external finance, stress in the corporate sector could easily translate into pressures in the banking system (Aiyar et al., forthcoming).

Global Corporate Stress Tests—Impact of the COVID-19 Pandemic and Policy Responses

Mr. Thierry Tressel,Xiaodan Ding
Global Corporate Stress Tests Impact of the COVID 19 Pandemic and Policy Responses Book PDF

Author : Mr. Thierry Tressel,Xiaodan Ding
Publisher : International Monetary Fund
Page : 54 pages
File Size : 45,8 Mb
Release : 2021-08-06
Category : Business & Economics
ISBN : 9781513590820

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Global Corporate Stress Tests—Impact of the COVID-19 Pandemic and Policy Responses by Mr. Thierry Tressel,Xiaodan Ding Pdf

Corporate sector vulnerabilities have been a central policy topic since the outset of the COVID-19 pandemic. In this paper, we analyze some 17,000 publicly listed firms in a sample of 24 countries, and assess their ability to withstand shocks induced by the pandemic to their liquidity, viability and solvency. For this purpose, we develop novel multi-factor sensitivity analysis and dynamic scenario-based stress test techniques to assess the impact of shocks on firm’s ability to service their debt, and on their liquidity and solvency positions. Applying the October 2020 WEO baseline and adverse scenarios, we find that a large share of publicly-listed firms become vulnerable as a result of the pandemic shock and additional borrowing needs to overcome cash shortfalls are large, while firm behavioral responses and policies substantially help overcome the impact of the shock in the near term. Looking forward, while interest coverage ratios tend to improve over time after the initial shock as earnings recover in line with projected macroeconomic conditions, liquidity needs remain substantial in many firms across countries and across industries, while insolvencies rise over time in specific industries. To inform policy debates, we offer an approach to a triage between viable and unviable firms, and find that the needs for liquidity support of viable firms remain important beyond 2020, and that medium-term debt restructuring needs and liquidations of firms may be substantial in the medium-term.

Corporate Sector Resilience in India in the Wake of the COVID-19 Shock

Lucyna Gornicka,Statistics Department,Ms. Sumiko Ogawa,Ms. TengTeng Xu
Corporate Sector Resilience in India in the Wake of the COVID 19 Shock Book PDF

Author : Lucyna Gornicka,Statistics Department,Ms. Sumiko Ogawa,Ms. TengTeng Xu
Publisher : International Monetary Fund
Page : 31 pages
File Size : 40,7 Mb
Release : 2021-11-19
Category : Business & Economics
ISBN : 9781589065871

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Corporate Sector Resilience in India in the Wake of the COVID-19 Shock by Lucyna Gornicka,Statistics Department,Ms. Sumiko Ogawa,Ms. TengTeng Xu Pdf

To assess the resilience of India’s corporate sector against COVID-19-related shocks, we conducted a series of stress tests using firm-level corporate balance sheet data. The results reveal a differential impact across sectors, with the most severe impact on contact-intensive services, construction, and manufacturing sectors, and micro, small, and medium enterprises. On policy impact, the results highlight that temporary policy measures have been particularly effective in supporting firm liquidity, but the impact on solvency is less pronounced. On financial sector balance sheets, we found that public sector banks are more vulnerable to stress in the corporate sector, partly due to their weaker starting capital positions. When considering forward-looking multiperiod growth scenarios, we find that the overall corporate performance will depend on the speed of recovery. A slower pace of recovery could lead to persistently high levels of debt at risk, especially in some services and industrial sectors.

COVID-19: How Will European Banks Fare?

Mr.Shekhar Aiyar,Mai Chi Dao,Mr.Andreas A. Jobst,Ms.Aiko Mineshima,Ms.Srobona Mitra,Mahmood Pradhan
COVID 19 How Will European Banks Fare Book PDF

Author : Mr.Shekhar Aiyar,Mai Chi Dao,Mr.Andreas A. Jobst,Ms.Aiko Mineshima,Ms.Srobona Mitra,Mahmood Pradhan
Publisher : International Monetary Fund
Page : 114 pages
File Size : 42,8 Mb
Release : 2021-03-26
Category : Business & Economics
ISBN : 9781513572772

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COVID-19: How Will European Banks Fare? by Mr.Shekhar Aiyar,Mai Chi Dao,Mr.Andreas A. Jobst,Ms.Aiko Mineshima,Ms.Srobona Mitra,Mahmood Pradhan Pdf

This paper evaluates the impact of the crisis on European banks’ capital under a range of macroeconomic scenarios, using granular data on the size and riskiness of sectoral exposures. The analysis incorporates the important role of pandemic-related policy support, including not only regulatory relief for banks, but also policies to support businesses and households, which act to shield the financial sector from the real economic shock.

Evaluation of Belgium’s COVID-19 Responses Fostering Trust for a More Resilient Society

OECD
Evaluation of Belgium s COVID 19 Responses Fostering Trust for a More Resilient Society Book PDF

Author : OECD
Publisher : OECD Publishing
Page : 291 pages
File Size : 42,7 Mb
Release : 2023-12-14
Category : Electronic
ISBN : 9789264840409

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Evaluation of Belgium’s COVID-19 Responses Fostering Trust for a More Resilient Society by OECD Pdf

This report builds on the OECD work on “government evaluations of COVID-19 responses”. It evaluates Belgium’s responses to the pandemic in terms of risk preparedness, crisis management, as well as public health, education, economic and fiscal, and social and labour market policies.

Belgium: Selected Issues

International Monetary Fund. European Dept.
Belgium Selected Issues Book PDF

Author : International Monetary Fund. European Dept.
Publisher : International Monetary Fund
Page : 59 pages
File Size : 42,6 Mb
Release : 2021-09-15
Category : Business & Economics
ISBN : 9781513598598

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Belgium: Selected Issues by International Monetary Fund. European Dept. Pdf

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The State as Financier of Last Resort

Bryn Battersby,Mr. Raphael A Espinoza,Jason Harris,Mr. Gee Hee Hong,Mrs. Sandra V Lizarazo Ruiz,Mr. Paolo Mauro,Amanda Sayegh
The State as Financier of Last Resort Book PDF

Author : Bryn Battersby,Mr. Raphael A Espinoza,Jason Harris,Mr. Gee Hee Hong,Mrs. Sandra V Lizarazo Ruiz,Mr. Paolo Mauro,Amanda Sayegh
Publisher : International Monetary Fund
Page : 37 pages
File Size : 52,9 Mb
Release : 2022-10-13
Category : Business & Economics
ISBN : 9798400220692

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The State as Financier of Last Resort by Bryn Battersby,Mr. Raphael A Espinoza,Jason Harris,Mr. Gee Hee Hong,Mrs. Sandra V Lizarazo Ruiz,Mr. Paolo Mauro,Amanda Sayegh Pdf

During the COVID-19 pandemic and global financial crisis, governments swiftly served as financiers of last resort through large financial support measures (FSMs) such as loan and guarantee programs and equity injections in firms. This Staff Discussion Note argues that such FSMs prevented bankruptcies and attenuated the recession by increasing firms’ liquidity, reducing risk premiums, and boosting confidence. But FSMs also carry large and long-lasting fiscal costs and risks. The note presents recommendations for managing the legacies of the COVID-19 programs and preparing for future crises. Ideally, FSMs should be assessed and included in budget plans, though a balance needs to be struck between speed and scrutiny.

The COVID-19 Impact on Corporate Leverage and Financial Fragility

Sharjil M. Haque,Mr. Richard Varghese
The COVID 19 Impact on Corporate Leverage and Financial Fragility Book PDF

Author : Sharjil M. Haque,Mr. Richard Varghese
Publisher : International Monetary Fund
Page : 51 pages
File Size : 44,6 Mb
Release : 2021-11-05
Category : Business & Economics
ISBN : 9781589064126

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The COVID-19 Impact on Corporate Leverage and Financial Fragility by Sharjil M. Haque,Mr. Richard Varghese Pdf

We study the impact of the COVID-19 recession on capital structure of publicly listed U.S. firms. Our estimates suggest leverage (Net Debt/Asset) decreased by 5.3 percentage points from the pre-shock mean of 19.6 percent, while debt maturity increased moderately. This de-leveraging effect is stronger for firms exposed to significant rollover risk, while firms whose businesses were most vulnerable to social distancing did not reduce leverage. We rationalize our evidence through a structural model of firm value that shows lower expected growth rate and higher volatility of cash flows following COVID-19 reduced optimal levels of corporate leverage. Model-implied optimal leverage indicates firms which did not de-lever became over-leveraged. We find default probability deteriorates most in large, over-leveraged firms and those that were stressed pre-COVID. Additional stress tests predict value of these firms will be less than one standard deviation away from default if cash flows decline by 20 percent.

Business Resilience in the Pandemic and Beyond

European Investment Bank
Business Resilience in the Pandemic and Beyond Book PDF

Author : European Investment Bank
Publisher : European Investment Bank
Page : 266 pages
File Size : 41,7 Mb
Release : 2022-05-18
Category : Business & Economics
ISBN : 9789286150876

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Business Resilience in the Pandemic and Beyond by European Investment Bank Pdf

COVID-19 set new challenges for the economies in Eastern Europe and Central Asia. Strong policy and fiscal support allowed businesses to stay afloat, with firms making long strides in innovation and in becoming global suppliers. This report examines the pandemic's business impact, trade and innovation, green economy and the financial gaps in this region. The report's analysis is based on the EBRD-EIB-WBG Enterprise Survey 2019, covering over 28 000 registered firms, and the first round of the COVID-19 Follow-up Enterprise Surveys, with over 16 000 firms.

Portugal

International Monetary,International Monetary Fund. European Dept.
Portugal Book PDF

Author : International Monetary,International Monetary Fund. European Dept.
Publisher : International Monetary Fund
Page : 44 pages
File Size : 43,5 Mb
Release : 2022-06-30
Category : Business & Economics
ISBN : 9798400215070

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Portugal by International Monetary,International Monetary Fund. European Dept. Pdf

Selected Issues

Switzerland: Selected Issues

International Monetary,International Monetary Fund. European Dept.
Switzerland Selected Issues Book PDF

Author : International Monetary,International Monetary Fund. European Dept.
Publisher : International Monetary Fund
Page : 42 pages
File Size : 45,9 Mb
Release : 2021-06-21
Category : Business & Economics
ISBN : 9781513586113

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Switzerland: Selected Issues by International Monetary,International Monetary Fund. European Dept. Pdf

Selected Issues

Spain: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain

International Monetary,International Monetary Fund. European Dept.
Spain 2021 Article IV Consultation Press Release Staff Report and Statement by the Executive Director for Spain Book PDF

Author : International Monetary,International Monetary Fund. European Dept.
Publisher : International Monetary Fund
Page : 88 pages
File Size : 45,6 Mb
Release : 2022-02-16
Category : Business & Economics
ISBN : 9798400201370

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Spain: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain by International Monetary,International Monetary Fund. European Dept. Pdf

The Spanish economy is recovering from the deep recession caused by the COVID pandemic and employment is already above its pre-pandemic level. A highly successful vaccination campaign helped limit the impact of the recent wave of infections on hospitalizations and economic activity. Output is expected to return to its pre-pandemic level by the end of 2022. However, there is significant uncertainty around the recovery path related to the evolution of the pandemic and the duration of global supply bottlenecks. The pace of absorption and the effectiveness of use of Next Generation EU (NGEU) funds will also affect growth in the coming years. In the near term, the key policy challenge is to continue to provide targeted pandemic support while facilitating resource reallocation and a transformation to a greener and more inclusive economy.

COVID-19 and SME Failures

Pierre-Olivier Gourinchas,Ṣebnem Kalemli-Özcan,Veronika Penciakova,Nick Sander
COVID 19 and SME Failures Book PDF

Author : Pierre-Olivier Gourinchas,Ṣebnem Kalemli-Özcan,Veronika Penciakova,Nick Sander
Publisher : Unknown
Page : 54 pages
File Size : 42,9 Mb
Release : 2020
Category : Business enterprises
ISBN : OCLC:1198085446

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COVID-19 and SME Failures by Pierre-Olivier Gourinchas,Ṣebnem Kalemli-Özcan,Veronika Penciakova,Nick Sander Pdf

Abstract: We estimate the impact of the COVID-19 crisis on business failures among small and medium size enterprises (SMEs) in seventeen countries using a large representative firm-level database. We use a simple model of firm cost-minimization and measure each firm's liquidity shortfall during and after COVID-19. Our framework allows for a rich combination of sectoral and aggregate supply, productivity, and demand shocks. We estimate a large increase in the failure rate of SMEs under COVID-19 of nearly 9 percentage points, absent government support. Accommodation & Food Services, Arts, Entertainment & Recreation, Education, and Other Services are among the most affected sectors. The jobs at risk due to COVID-19 related SME business failures represent 3.1 percent of private sector employment. Despite the large impact on business failures and employment, we estimate only moderate effects on the financial sector: the share of Non Performing Loans on bank balance sheets would increase by up to 11 percentage points, representing 0.3 percent of banks' assets and resulting in a 0.75 percentage point decline in the common equity Tier-1 capital ratio. We evaluate the cost and effectiveness of various policy interventions. The fiscal cost of an intervention that narrowly targets at risk firms can be modest (0.54% of GDP). However, at a similar level of effectiveness, non-targeted subsidies can be substantially more expensive (1.82% of GDP). Our results have important implications for the severity of the COVID-19 recession, the design of policies, and the speed of the recovery

United Kingdom: Financial Sector Assessment Program-Systemic Stress, and Climate-Related Financial Risks: Implications for Balance Sheet Resilience

International Monetary,International Monetary Fund. Monetary and Capital Markets Department
United Kingdom Financial Sector Assessment Program Systemic Stress and Climate Related Financial Risks Implications for Balance Sheet Resilience Book PDF

Author : International Monetary,International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 123 pages
File Size : 51,5 Mb
Release : 2022-04-08
Category : Business & Economics
ISBN : 9798400206504

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United Kingdom: Financial Sector Assessment Program-Systemic Stress, and Climate-Related Financial Risks: Implications for Balance Sheet Resilience by International Monetary,International Monetary Fund. Monetary and Capital Markets Department Pdf

The FSAP started in an important macro-financial phase right after the second Covid wave and a third lockdown. The balance sheet resilience of major institutional sectors was at the center of policy considerations. Against this backdrop, the FSAP analyzed the pandemic’s potential “scarring” of banks, insurers, corporates, and households balance sheets, focusing on the interplay of macro-financial/structural conditions and financial vulnerabilities.

Republic of Latvia

International Monetary,International Monetary Fund. African Dept.
Republic of Latvia Book PDF

Author : International Monetary,International Monetary Fund. African Dept.
Publisher : International Monetary Fund
Page : 25 pages
File Size : 53,8 Mb
Release : 2022-08-23
Category : Business & Economics
ISBN : 9798400218200

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Republic of Latvia by International Monetary,International Monetary Fund. African Dept. Pdf

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