Evidence on the impact of the public guarantee and direct aid schemes on Spanish firms during the covid-19 crisis

Roberto Blanco and Sergio Mayordomo
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Roberto Blanco: BANCO DE ESPAÑA

No 2317, Occasional Papers from Banco de España

Abstract: After the outbreak of the COVID-19 pandemic, the economic authorities in many countries took steps to support firms’ liquidity and solvency. This article analyses the effects of two such measures implemented by the Spanish authorities: the public guarantee schemes and direct aid. The results show that public guarantees were essential in enabling many companies to cover their main liquidity needs. In particular, this scheme was especially useful for SMEs and for companies operating in the sectors hit more severely by the health crisis, although it did not significantly alleviate the increased funding needs of companies without prior credit relationships. For its part, direct aid appears to have contributed to a very moderate reduction in the business solvency problems generated by the COVID-19 crisis, since only a small part of the aid was allocated to those companies that needed solvency support.

Keywords: business solvency; liquidity needs; public aid; COVID-19 crisis; bank credit (search for similar items in EconPapers)
JEL-codes: G21 G28 G30 G33 H81 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2023-10
New Economics Papers: this item is included in nep-cfn and nep-ent
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Persistent link: https://EconPapers.repec.org/RePEc:bde:opaper:2317e

DOI: 10.53479/34592

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