Corporate Liquidity and Solvency in Europe during COVID-19: The Role of Policies - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Corporate Liquidity and Solvency in Europe during COVID-19: The Role of Policies write by Mr.Christian H Ebeke. This book was released on 2021-03-02. Corporate Liquidity and Solvency in Europe during COVID-19: The Role of Policies available in PDF, EPUB and Kindle. 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).
Corporate Sector Resilience in India in the Wake of the COVID-19 Shock
Corporate Sector Resilience in India in the Wake of the COVID-19 Shock - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Corporate Sector Resilience in India in the Wake of the COVID-19 Shock write by Lucyna Gornicka. This book was released on 2021-11-19. Corporate Sector Resilience in India in the Wake of the COVID-19 Shock available in PDF, EPUB and Kindle. 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.
Global Corporate Stress Tests—Impact of the COVID-19 Pandemic and Policy Responses
Global Corporate Stress Tests—Impact of the COVID-19 Pandemic and Policy Responses - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Global Corporate Stress Tests—Impact of the COVID-19 Pandemic and Policy Responses write by Mr. Thierry Tressel. This book was released on 2021-08-06. Global Corporate Stress Tests—Impact of the COVID-19 Pandemic and Policy Responses available in PDF, EPUB and Kindle. 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.
The COVID-19 Impact on Corporate Leverage and Financial Fragility
The COVID-19 Impact on Corporate Leverage and Financial Fragility - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The COVID-19 Impact on Corporate Leverage and Financial Fragility write by Sharjil M. Haque. This book was released on 2021-11-05. The COVID-19 Impact on Corporate Leverage and Financial Fragility available in PDF, EPUB and Kindle. 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.
Economic Policy, COVID-19 and Corporations
Economic Policy, COVID-19 and Corporations - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Economic Policy, COVID-19 and Corporations write by Katarzyna Mroczek-Dąbrowska. This book was released on 2023. Economic Policy, COVID-19 and Corporations available in PDF, EPUB and Kindle. "This book addresses the economic impact of the COVID-19 outbreak on Central and East European countries and examines the effect the pandemic has had on organizations in the region. It focuses on the widely understood business environment, covering companies' responses to the crisis, the role of institutions in stabilizing markets, and the reshaping of global business trends. The book is a complex and multidimensional work that draws its roots from distinct yet simultaneously interlinked research areas. All of the chapters, whether they refer to macro-, meso- or micro-perspectives, always highlight how crises - global and regional - change the global trends we have observed in business in the last 20 years. The book includes the most topical issues that delineate public discourse on firms' resilience. In this way, it 'connects the dots' and uncovers the missing links necessary for any reader wishing to understand the specificity of contemporary companies' responses to unexpected events such as pandemics or geopolitical crises. Further, it tackles questions such as what role institutions play in building the adaptive capacity of companies, how companies build their resilience capacity for 21st century crises and what the significance of the uncertainty, the information asymmetry, and the bounded rationality concept on the company's decision-making process is. The book will find a broad audience among academics and students across diverse fields of study, as well as practitioners and policymakers. It is a key reference for all those who want to better understand the complex nature of uncertainty, crisis management, and its implications, not only for CEE countries but, first and foremost, the business environment"--
