IDEAS home Printed from https://ideas.repec.org/p/bis/bisblt/40.html
   My bibliography  Save this paper

Liquidity to solvency: transition cancelled or postponed?

Author

Listed:
  • Ryan Niladri Banerjee
  • Joseph Noss
  • Jose María Vidal Pastor

Abstract

Since the start of the Covid-19 pandemic, a "bankruptcy gap" has emerged between measures of expected and realised bankruptcies globally. The ample supply of credit to make up for short-term losses has been an important factor decoupling bankruptcies from the sharp reduction in firms' cash flows. Firms' reliance on credit suggests that it may be too early to dismiss future solvency risk. Significant increases in leverage and weak earnings forecasts in some sectors suggest that for some firms, greater credit extension may have only postponed, rather than cancelled, their insolvency.

Suggested Citation

  • Ryan Niladri Banerjee & Joseph Noss & Jose María Vidal Pastor, 2021. "Liquidity to solvency: transition cancelled or postponed?," BIS Bulletins 40, Bank for International Settlements.
    • Handle: RePEc:bis:bisblt:40
    as

    Download full text from publisher

    File URL: https://www.bis.org/publ/bisbull40.pdf
    File Function: Full PDF document
    Download Restriction: no
    File URL: https://www.bis.org/publ/bisbull40.htm
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bis:bisblt:40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Beslmeisl (email available below). General contact details of provider: https://edirc.repec.org/data/bisssch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.