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Covid-Induced Bankruptcies Risk Hurting U.K.’s Finance Industry

July 29, 2020, 11:33 AM

The U.K.’ financial industry faces significant risks from the wave of bankruptcies that could occur as a result of the Covid crisis, a Bank of England economist warned.

Unlike the previous downturn, the most direct fallout from the pandemic looks set to occur outside of finance, Michael Kumhof, a senior research adviser wrote in a review of macroeconomic literature on the BOE’s staff blog Wednesday. However, the industry is unlikely to remain immune and more research will be needed that links fiscal, macroprudential and monetary responses, including monetary financing, he said.

“The aftermath of the corona shock will affect many ...