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solvency

  • Wednesday 14/4/2021
    Karel Baert

    Interview met Karel Baert, CEO van Febelfin.

  • Wednesday 10/3/2021
    Hilde Vernaillen

    Interview met Hilde Vernaillen, CEO van P&V Group en voorzitster van Assuralia.

  • 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.

  • Tuesday 1/12/2020
    Jean Hilgers

    This article provides an overview of recent relevant developments for the financial sector and financial stability in Belgium. Next to the uncertain macro-financial context, it covers developments in credit to the real economy, the impact of the COVID-crisis on banks’ and insurance companies’ activities and results, trends in the Belgian real estate market as well as more structural challenges facing the Belgian financial sector. It also provides an overview of recent prudential measures and recommendations to the financial sector.

  • 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.