Report
Increased financial imbalances after the coronavirus crisis
In OECD countries, the coronavirus crisis will lead to : A rise in corporate debt ratios, as companies have to borrow to offset the decline in their revenues; An increase in risky loans in banks’ assets, as they have lent to companies in difficulty during the crisis; A rise in public debt ratios, due to the expansionary fiscal policies implemented; An increase in the quantity of money, due to the expansionary monetary policies implemented. We therefore see that all financial imbalances will increase because of the coronavirus crisis. The effect of this situation on risk premia is ambiguous: on the one hand, the financial fragility of companies, banks and governments is increased; on the other hand, the liquidity to be invested is more abundant.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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