“It’s of course important to watch over the very big, systemic companies and find solutions for them,” Jung said.
“After a long period of low insolvency numbers, a trend reversal has now set in,” says Steffen Mueller of the IWH. “The step from the world’s leading industrial nation to the industrial museum has never been so small,” Wolfgang Grosse Entrup told Reuters. Christoph Schalast, a professor at the Frankfurt School of Finance and Management, said there was no significant increase in non-performing loans during the pandemic, when government support programs helped companies.
They may look bad now because insolvency numbers were artificially depressed during the pandemic in 2020-2021 when the government propped up ailing firms with state aid and suspended legislation obliging them to file for insolvency. “Banks have now clearly picked up the alarm signal, nevertheless they’re sitting in a very comfortable position,” Juergen Sonder, president of the Federal Association of Loan Purchase and Servicing, told Reuters.Restructuring expert Lucas Floether told Reuters that the government should not try to protect companies by throwing taxpayer money at them if their business models were fundamentally unsound.
Source: Energy Industry News (energyindustrynews.net)