Post COVID-19 recovery: focus on sustaining viable businesses
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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.