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liquidity

  • Tuesday 31/8/2021
    Arnaud Navez

    This article is based on the intervention of Arnaud Navez, CFO of Argafin, during the Belgian Financial Forum Webinar on enterprise financing (June the 8th, 2021).

  • Tuesday 31/8/2021
    UWE

    On June the 8th 2021, the Belgian Financial Forum and the Union Wallonne des Entreprises co-organised a Webinar on the financing of the Walloon enterprises in the aftermath of the COVID crisis. This article is based on the interventions during this Webinar.

  • Wednesday 10/3/2021
    Olivier De Jonghe, Christophe Piette & Joris Tielens

    The COVID-19 crisis has taken its toll on the Belgian corporate sector. A sudden drop in revenues and imperfect downscaling of costs has put considerable pressure on firms’ cash buffers. In this article, we document the pockets of corporate liquidity and solvency risk and examine the role of various policy measures taken to keep businesses afloat. We show that the support measures taken have successfully dampened cash outflows of firms. Despite these interventions, approximately one out of six non-financial firms are estimated to remain with pressing cash deficits attributable to the pandemic prior to the start of the second wave. Our analysis documents a non-trivial rise in solvency risk. Losses caused by the COVID-19 crisis have severely eroded many firms’ equity in the most affected sectors and replenishing their cash reserves would involve a substantial rise in their indebtedness in the absence of alternative financing sources.

  • Thursday 5/11/2020
    Hans Degryse

    COVID-19 puts firms under severe strain in countries where the pandemic continues to hit. The initial reaction was to provide outright transfers and liquidity support to weather this perfect storm. We argue that a focus on the solvency of firms and sectors is needed. We discuss several avenues on how to improve firm solvency such as conditional transfers and a pandemic equity fund. We further argue that support policies should avoid a further zombification of the economy: preserve firms (and jobs) that have a post-COVID-19 viable business model. Redirecting resources to the future engines of growth is desirable. Banks, policy makers and businesses face a balancing act to keep firms and sectors with “post-corona viable business models” liquid and solvent. At the same time, policymakers should avoid zombification and allow for creative destruction such that firms with “post-corona non-viable business models” are reorganized or liquidated.

  • Thursday 5/11/2020
    Peter Reusens, Geoffrey Minne

    Seven months after it was launched, the ERMG survey continues to take the pulse of the Belgian companies by measuring the impact of the COVID-19 crisis on their economic activity and their financial health. After a partial rebound between May and August, the Belgian companies’ (self-reported) turnover stalled in September and October at -14 % below normal levels. Moving forward, the COVID-19 crisis will most likely leave scars on the economy as expectations about next year’s revenue, investment plans, employment and risk of bankruptcy remain gloomy. In addition, the recent further worsening of the health situation and the new restrictive measures including the second lockdown of November 2020 are not yet reflected in the latest survey dating from October 20. These recent developments will undoubtedly worsen the already bleak economic outlook. Finally, the crisis will also have a lasting impact on the way employees will work: with wider use of telework, more flexible working hours and less business travel.

  • Wednesday 19/6/2019

    This is a report of the panel discussion, following the masterclass of Mathias Dewatripont, at the Universiteit Antwerpen, on April 4th, 2019.