Pandemic-Induced Credit Losses Could Hit $1 Trillion, BIS Says
- Bankruptcy rates to rise as support for companies expires
- Recreation poised for particularly hard blow, researchers find
A closed down retail outlet on Rue de Rennes in Paris.
Photographer: Benjamin Girette/BloombergThis article is for subscribers only.
Waves of bankruptcies triggered by the coronavirus pandemic will wipe as much as $1 trillion from the value of global corporate debt markets, the Bank for International Settlements warned.
Company insolvencies “are expected to rise as measures to support credit are wound back, new consumption habits and business practices accelerate the downsizing of specific sectors,” the BIS wrote in a quarterly report published on Monday. “The looming increase in corporate bankruptcies will generate credit losses that will need to be absorbed, either by the financial system or by taxpayers.”