Non-financial corporate health during the pandemic

Gabe de Bondt, Arne Gieseck, Giulio Nicoletti and Mika Tujula

Economic Bulletin Boxes, 2021, vol. 6

Abstract: This box assesses the health of the euro area non-financial corporate sector at an aggregate level during the coronavirus (COVID-19) pandemic using the quarterly sectoral accounts. The results suggest that non-financial corporate liquidity was safeguarded at the aggregated sector level. This was mainly due to a build-up of cash buffers, as is typical for crisis periods, and the timely and extensive reactions from the monetary, fiscal and supervisory authorities. Policy interventions provided direct and indirect support to non-financial corporations and enabled firms to substantially increase their recourse to debt financing. However, non-financial corporate profitability, operating efficiency, indebtedness and vulnerabilities came under pressure, increasing the risk of a rise in firm defaults in the future. JEL Classification: E22, E32

Keywords: COVID-19; Non-financial corporations; profitability; liquidity; solvency (search for similar items in EconPapers)
Date: 2021-09
Note: 337418
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