The coming covid-19 credit crunch 新冠信贷紧缩来袭
The World in 2021 2021年的世界
A credit crunch is coming, says the World Bank’s chief economist
THE COVID-19 crisis did not start as a financial crisis, but it is morphing into one—and a global one at that. The headlines of 2020 have been dominated by news of the pandemic’s spread, record-shattering falls in output, and surges in poverty and the newly unemployed. Behind these disturbing trends a quieter financial balance-sheet crisis is gathering momentum across a broad swathe of countries. The financial fallout from the pandemic does not respect differences by region or income status. Financial institutions are facing (and will face for some time) a marked rise in non-performing loans (NPLS).
Historically, banking crises emerge after a lengthy expansion in economic activity. Growth is often fuelled by a credit boom and rising leverage. Under the motto of “this time is different”, asset-price bubbles emerge during the biblical “seven fat years” (whether in property, commodities, equity or bonds). As the economic expansion slows and turns into recession, loans made during the good times turn sour. Sometimes balance-sheet problems undermine confidence, and runs on banks and financial institutions turn the crisis into a fully fledged panic. Households and firms attempt to deleverage after the crisis, even as banks adopt tighter lending standards. If banks resist writing down bad loans in favour of “evergreening”, as was the case in Japan’s crisis in the early 1990s and in Europe after 2007-09, the resulting credit crunch may be longer and more severe, even surpassing the biblical “seven lean years”.
But this time truly is different. The run-up to the credit crunch in 2021 does not fit the historical boom-bust pattern in many countries. It is not predicated on having experienced an economic expansion or an asset-price bubble. The common threads to the evolving balance-sheet crisis and the credit crunch that will follow are the historic magnitudes and likely persistence of the slump in economic activity. It is also a regressive crisis, disproportionally hitting low-income households and smaller firms that have fewer assets to avert insolvency.
High leverage on the eve of the pandemic will amplify the balance-sheet problems of the financial sector. Companies in the world’s largest economies, America and China, are highly indebted and skewed towards high-risk borrowers. The IMF has repeatedly flagged concerns about the pre-pandemic rise in corporate leverage in many emerging markets, where much debt is denominated in dollars. Six months into the covid-19 crisis, S&P had downgraded or cut the outlook on almost 60% of the Latin American companies it rates. For the rest of the world the share is about 35-40%. Exposure to commercial property, as malls remain half-empty, is another source of concern in many parts of the world.
Australia and Canada, among others, have record levels of household debt. In Africa, where the NPL ratio was estimated at around 11% in 2019, microfinance institutions’ portfolios will come under stress, as much of their lending is to households with volatile income and no assets. India was already dealing with an NPL ratio of about 9% in the run-up to the pandemic, and new lending in recent years had already stalled as a result of efforts to clean up the balance-sheets of state banks.
Since the onset of the pandemic, a range of policies has been introduced by governments across the world to provide liquidity to the many businesses that have been shuttered during the lockdowns and to support households hit by a sudden loss of income and employment. Grace periods in the repayment of existing loans have been granted. Re-contracting of loans in favour of longer maturities or lower interest rates has also been common. The hope is that because the health crisis is temporary, the financial distress of firms and households will be, too. However, even with a prompt resolution of the pandemic in the form of a globally available vaccine, significant damage has been inflicted on the global economy and the balance-sheets of financial institutions.
Given the emergency, these policies have provided a valuable stimulus tool beyond the conventional scope of fiscal and monetary policy. But by 2021 grace periods will come to an end and it will become apparent whether the problem facing countless firms and households is insolvency rather than illiquidity. An extended credit crunch has been a major headwind to economic recovery in the past. There is little to suggest that it will be different in the post-pandemic landscape.
bread and butter 黄油面包(名词)
They sang and danced all night.(动词) 他们整夜又唱又跳。
I went home and Tom stayed at the station.(两个并列句)
They drank, sang and danced all night.
I went back home, Lucy went with me, and Tom stayed at the station.
③用and连接这些成分时，往往是把音节最短的放在最前面，如big and small,cup and saucer，等。
hands and knees; knife and fork; bread and butter; men, women and children
the bread and (the) butter; in France and (in) Germany
⑥口语中在try, wait, mind, care后面通常使用and来代替不定式的to。
Try and get some unsalted butter.(也可说Try to...)
I really must try and see Mary this week. (或说...try to...)
You must mind and arrive by six. 你必须注意6点前到。
＊这样用时，try, wait等and 前面的动词通常是用祈使语气或不定式(不带to)，不能用tries, tried或trying。如，不能说：I tried and got.../He always tries and gets.../We waited and saw.
⑦在come, go, run, hurry up, stay, stop等其他一些动词后，也常用and代替表示目的的不定式to。
Come and have a drink. 来喝一杯。
Hurry up and get dressed. 赶快把衣服穿好。
Stay and have dinner. 留下来吃饭吧。
I ought to stop and think. 我应该停下来想一想。
Would you go and tell the children to keep silence?
I went and had a drink with Jack yesterday. 昨天我去跟杰克喝了两杯。
He usually stays and has dinner with us on Sundays.
⑨而在美式英语中，go和come后面的and往往省掉。Go jump into the river. 去跳进河里。
She tried to persuade the girl to come live with her.
He left home to go live in Beijing. 他离家到北京去住。Come have a drink.过来喝一杯。
Is it green or blue? 它是绿的还是蓝的？
Are you going there before or after lunch?
Do you want a bath now, or shall I have mine first?
Whether he comes or not, it doesn't make any difference.
There's one or two things I'd like to discuss with you.
Which is it, the black one or the red one?
②or 还可表示“否则”，与or else相同。
Hurry or/or else you won't make the train.
He never smokes or drinks. 他既不吸烟，也不喝酒。
He did not write legibly or correctly. 他写得既不清楚，也不正确。
The problem is, I don't know any editors or writers.
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