Volgens Daniel Lacalle dreigt er een credit crunch, vooral voor kleinere bedrijven, eenmansfirma’s en ZZP’ers. Die worden niet geholpen met extra geld voor de beurzen.

Emergency: SMEs Face A Global Crunch Drowned In Liquidity

Duur: 4:35 min.

Publicatie 14 maart

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Emergency: SMEs Face A Global Crunch Drowned In Liquidity

Many countries have decided to lock down entire cities and shutdown airspace to contain the spread of coronavirus. This decision may create a massive crisis drowned in liquidity.

Governments and central banks are committed to do whatever it takes in terms of demand-side policies, spending and increasing liquidity as much as needed to avoid a 2008-style crisis. However, these measures, which were already ineffective for years, will be even less successful this time.

To start with, global policymakers made the mistake of implementing aggressive easing policies in a period of growth, which left them without effective tools to address the financial turmoil. When central banks cut rates and inject billions of liquidity in a period of growth and risk appetite, an urgent reaction due to a black swan scenario like coronavirus finds them with no tool that makes a significant impact. What impact will the ECB have with a 120 billion euro per month asset purchase when it has already bought almost 20% of eurozone governments’ debt in its misguided monthly 20 billion euro purchase and deposit rates are negative? None. Sovereign debt in the eurozone already trades with a negative yield, and buying corporate bonds of zombie multinationals did not help the eurozone economy nor will it help now.

Adding a monetary facility for SMEs only helps those who are indebted now, it does nothing for those small and medium companies that were prudent all throughout these years and now face a collapse in sales and accumulating fixed costs.

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