Small EU Firms Hold Mountain Of Debt, Could Be Next Major Headache For Banks
Many businesses are clinging (on using) to cheap loans. However, the longer the current crisis continues the larger the pile of debt. That debt must be repaid (or defaulted on.)
What’s worrying today is that excessive optimism comes as European governments invest in the recovery by increasing public spending as the central bank keeps rates low and floods capital markets with liquidity.
The problem is that banks have high exposure to small business loans, which is the backbone of the continent’s economy.
If these loans go bad we could have a whole new set of economic problems.
This article was originally posted here: https://www.ac2news.com/2021/01/small-eu-firms-hold-mountain-of-debt-could-be-next-major-headache-for-banks/.