2023-07-19 20:24:21
The global economy is currently witnessing a significant increase in corporate bankruptcies, as a result of the debt burdens that have accumulated over the past few years, the repercussions of which will burden the global economy, according to what was indicated by the US “Bloomberg” agency.
A storm of corporate debt is piling up
Data collected by the agencybloombergThe American company pointed out that a wave of corporate bankruptcies “is now piling up globally, despite the receding fears of the credit crisis.”
The agency stated, in a report published on Wednesday, that a storm of corporate debt distress is accumulating, amounting to more than $500 billion, and is already beginning to make its presence felt around the world.
The agency expected this number to continue to rise, which leads to deepening fears on Wall Street, stressing that the consequences of this crisis may slow global economic growth and exhaust credit markets that are still recovering from the large losses they suffered, which are considered deeper. losses for decades.
Likewise, the “Bloomberg” report dealt with the accumulation of corporate debt, which will lead to an inevitable default, and thus a tidal wave of bankruptcies.
In this regard, the report mentioned recently by Richard Cooper, a partner in the major American law firm “Clary Gottlieb”, which specializes in corporate bankruptcy cases, and whose work has always focused on advising companies all over the world for decades, on what to do when these companies sink. in debt.
Cooper emphasized that he is “doing it once more now, in a year in which large corporate bankruptcies are piling up at the second fastest rate, since 2008,” that is, since the global financial crisis that hit the financial and real estate markets.
“It looks different from previous cycles, we will see a lot of defaults,” Cooper said.
Cooper also got, through his position, an intimate preview of the $500 billion-plus corporate debt storm that has already begun to cause bankruptcies around the world.
The report concludes by noting that monetary policy makers have been surprised by the large and continuous rise in inflation, and they are “forcefully” draining liquidity from the global financial system, and are intentionally seeking to “slow down their economies by stopping the flow of credit to companies,” noting that this inevitably means that Some of them will fail mightily.
Also read: The World Bank: pessimistic forecasts for international economic growth rates
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