Zombie Companies Littering Europe May Tie the ECB's Hands for Years
- BofA says 9% of European firms have subpar interest coverage
- ECB policy normalization constrained by corporate debt fears
Citigroup Sees Long Lag Between ECB Taper and Hike
This article is for subscribers only.
Watch out for the zombies.
The plethora of companies propped up by the European Central Bank will limit policy makers’ ability to withdraw monetary stimulus that’s been supporting the continent’s bond market since the financial crisis, according to strategists at Bank of America Corp. About 9 percent of Europe’s biggest companies could be classified as the walking dead, companies that risk collapse if the support dries up, according to the analysts.