Private banks in Germany do not expect a huge wave of bankruptcies as a result of the coronavirus crisis. "The recent low level of insolvencies in Germany paints a distorted picture. What is clear is that corporate insolvencies will increase," Christian Ossig, chief executive of the Association of German Banks (BdB), told dpa. "However, we do not expect a sudden increase, but a process that will take several months."
The association's experts expect 24,000 company bankruptcies this year - fewer than initially feared by some observers. "These are numbers that seem manageable," Ossig noted. "Banks in Germany are well prepared for this because they have taken good precautions. Capital buffers have been significantly strengthened, and risk provisioning was already increased last year."
The forecasted economic recovery should "not be a flash in the pan," the BdB experts affirm in their report. Above all, the banks must be put in a position where they can play a decisive role in financing a structural change toward sustainability and digitalization.
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