Should we fear a wave of bankruptcies?

Economic activity seems to have bottomed out in April-May in most developed countries. The rebound has begun, at a brisk pace in some sectors as demand is finally unshackled. But some of the effects of the adverse shock will only be felt belatedly. Corporate bankruptcies typically rise in the six to twelve months after a recession peak. In this recession, economic policy has reacted very quickly to avoid tightening credit conditions as much as possible. This may limit the wave of...