BIS paper studies how weak banks beget zombie firms

piggy-banks

Undercapitalised banks have a tendency to provide too much lending to weak firms and not enough to strong ones, helping create a zombified economy, according to a working paper published on November 9 by the Bank for International Settlements.

Authors Fabiano Schivardi, Enrico Sette and Guido Tabellini take Italy as their case study, noting its deep recession, absence of bank recapitalisations and lack of a ‘bad bank’ make it a particularly useful case study of the detrimental effects of weak b

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: