‘Contagious zombies’ menace German economy – Bundesbank paper
ECB’s policies have increased flow of credit to “non-viable firms”, researchers say
Unconventional lending by the European Central Bank has increased credit supply to “non-viable” firms in Germany, a working paper published by the Deutsche Bundesbank finds.
In Contagious zombies, Christian Bittner, Falko Fecht and Co-Pierre Georg investigate the effect of unconventional monetary policy on banks’ lending to non-financial firms. They examine whether it incentivises banks to expand their credit to otherwise non-viable firms, a practice widely known as “zombie lending”.
The
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