A worldwide credit crunch triggered by the coronavirus will set in motion a wave of corporate bankruptcies that will make the global financial crisis look like “child’s play”, investors have warned. With the world’s most advanced economies all entering a shutdown that could last months, companies that have gorged on cheap money for the past decade face going out of business thanks to a huge spike in borrowing costs on international money markets. The sudden loss of revenue faced by airlines, tourism-related businesses and carmakers make them extremely vulnerable, ratings agencies have said, with parts of the energy sector also at risk as the fall in the oil price to an 18-year low pulls the rug from under its feet. The problems were underlined on Thursday when Australia’s national carrier, Qantas, cancelled all international flights and furloughed 20,000 staff. Dozens of companies in Europe and the US have issued profit warnings as they prepare for a massive hit to revenues. The financial position of the UK’s North Sea oil and gas industry was “paper-thin”. Currencies such as UK sterling and the Australian dollar were hammered as the clamour for safety sucked money into US dollar holdings. US treasury secretary Steve… Read full this story
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