Japan’s growing debt overhang adds to zombie threat
Business failures in Japan have been stemmed thanks to massive government and bank liquidity support. However, there’s mounting concern regarding debt overhang: A survey of small firms shows that 34% find their debt excessive and that 14% already had excessive debt prior to the pandemic.
What you will learn:
- Some evidence of debt overhang and a rise in zombie firms.
- Relatively healthy small firms will voluntarily close business.
- Debt-overhang and zombies will weigh on bank profitability and productivity.
Tags:
Related Services
Post
High debt costs suggest European office price correction
Our analysis suggests a 10% correction is needed on average for the major office markets in Europe to compensate for the higher cost of debt, with prime yields required to soften by 10bps-75bps to generate a low-risk interest coverage ratio at a reasonable LTV.
Find Out More
Post
Why an ageing population doesn’t mean soaring inflation
What’s the future for inflation? Joachim Nagel, the new president of Germany's central bank, believes the rapidly ageing global population will play a key role – ramping up pressure on prices in the medium term. While we agree slowing labour supply will stifle output growth, in his recent discussion Nagel failed to fully consider the demand side of the argument.
Find Out More