Expiring aid measures are likely to increase insolvencies
Due to the corona crisis, the number of insolvencies is likely to increase in the coming years, according to forecasts by the National Bank. For the domestic banking system, however, this increase should remain “manageable”. The banks should, however, save now in order to remain resilient and to be able to counter a potentially falling credit quality.
This year, the government's Corona aid measures have pushed the number of bankruptcies down significantly. The banking system also contributed indirectly to this. “The banking system has made a great deal of liquidity available to companies,” said OeNB Governor Robert Holzmann. The companies used this liquidity primarily to maintain business operations, but less so for new investments.
Without any fiscal measures, 5.5 percent of the companies would have become insolvent, says Doris Ritzberger-Grünwald, director of the Economics Department of the Oesterreichische Nationalbank (OeNB). With the measures, however, this rate falls by two thirds. “Over-indebtedness is not a reason for bankruptcy at the moment,” said Ritzberger-Grünwald.
The most effective aid measures are the loan guarantees as well as the fixed cost subsidy and short-time work. In contrast, deferrals of social security contributions could only temporarily reduce bankruptcies. From today's perspective, these deferrals will expire in the coming year and the bankruptcies are then likely to rise again, said Ritzberger-Grünwald.
