Berlin (Reuters) – Despite the risks to the banking system from the Corona crisis, the leading economic research institutes do not see a new financial crisis looming.
For the coming months, noticeably rising insolvency figures are to be expected, write the institutes in their autumn report published on Wednesday for the federal government. However, given the good capitalization before the crisis and the measures taken to monitor the stability of the financial system, it can be assumed that a financial crisis could be prevented. The researchers also expect that lending will not be “unduly” affected.
The institutes point out that, due to the suspension of the obligation to file for insolvency, no increase in bankruptcies in Germany has been seen in the statistics. But in particular many smaller companies that have not yet filed for bankruptcy due to the lifting of the obligation to file for bankruptcy will, in the opinion of the institutes, be forced to give up in the near future the researcher.
The Bundesbank recently warned that financial institutions would have to prepare for a wave of corporate insolvencies and increasing loan defaults. In the entire corporate sector, bankruptcies could rise to over 6,000 in the first quarter of 2021. That would be an increase of more than 35 percent, but less than in the global financial crisis when around 8,000 companies went bankrupt every quarter. According to the Bundesbank, this scenario is manageable for credit institutions, but a significantly greater increase in insolvencies cannot be ruled out.