by In March 2021, the Bank of International Settlements published a paper that received far too little attention. The authors noticed that, relative to the size of the economic downturn, too few businesses were going bankrupt. They dug into why this was, and lo and behold they found that businesses were tapping into credit markets. They were borrowing to keep the lights on. Specifically, they found that the at-risk companies were in the "airline, hotels, restaurants and leisure sectors"—all those sectors heavily impacted by the lockdownsExamining the research and the markets, it appears that investors have a rationale of sorts for this massive increase in lending at historically low interest rates. They seem to assume that the post-COVID bounce back in the service sectors will be nothing
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
New Economics Foundation writes Is the Labour government delivering on its promises?
John Quiggin writes Dispensing with the US-centric financial system
New Economics Foundation writes Whose growth is it anyway?
Matias Vernengo writes What is heterodox economics?
In March 2021, the Bank of International Settlements published a paper that received far too little attention. The authors noticed that, relative to the size of the economic downturn, too few businesses were going bankrupt. They dug into why this was, and lo and behold they found that businesses were tapping into credit markets. They were borrowing to keep the lights on. Specifically, they found that the at-risk companies were in the "airline, hotels, restaurants and leisure sectors"—all those sectors heavily impacted by the lockdowns
Examining the research and the markets, it appears that investors have a rationale of sorts for this massive increase in lending at historically low interest rates. They seem to assume that the post-COVID bounce back in the service sectors will be nothing short of magical. Yet thinking about it for even a moment suggests that this justification is nonsensical.
Newseek
The Next Financial Crisis is Coming | Opinion PHILIP PILKINGTON