Senin, 10 Februari 2014

The corporate insolvency as responsible for the lack of business credit

If we did a small survey citizens about the responsibility of the insolvency of many families and businesses and credit drought , it is likely that the result is mostly blame the lender. However, although it is possible that banks have acted badly at times ( in the case of preference , for example) , it is rarely the lender who has to assume full responsibility for the bad investment.

Specifically , we tend to blame the financial institutions of the lack of credit and lack of refinancing or debt restructuring , which leads to many companies , mainly small to insolvency without remedy , but the latest data on rate delinquency Official credit Institute (ICO ) , in which two of every five loans made by the credit agency defaults on some lines end , suggest otherwise.
Based on these data , it is conceivable if , contrary to what we are told from the mainstream media , the credit crunch has less to do with bank insolvency , and the lack of confidence in the debtors , especially business . That the ICO , public entity granting loans to SMEs that can not get by other means, has the highest delinquency rate among all financial institutions , including Bank , and the fact that it is producing the phenomenon known as crowding out , ie that they are devoting resources to finance current spending on public sector rather than productive investments, in addition to the financial cost per loan highest in Europe , demonstrate this theory.
While not produce the necessary deleveraging process will be very difficult to restore that trust. Businesses and families are so indebted that financial institutions do not want to grant more credit until they have some assurance that they will repay the debts. And that , not even a bank recapitalization and liquidation fix it . Credit depends on trust and this , in turn , to demonstrate solvency. If any of them fails, the credit tap remain closed .

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