Many investors fret that a corporate zombiepocalypse may be one of the thorniest problems the global economy faces in the coming years. But a bombshell paper by the New York Federal Reserve argues that this fear may be overdone.
Even before the eruption of coronavirus, concerns that a growing horde of walking-dead companies usually defined as those unable to cover debt-servicing costs from long-run profits were pervasive.
Two years ago, the Bank for International Settlements calculated that the share of zombie companies across the 14 big economies it studied had climbed from 2 per cent in the late 1980s to 12 per cent by 2016. The driver was that they stayed undead for longer than in the past, neither recovering nor dying out. The mos…
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