Q: Will the loans made to small businesses to help them through the crisis have a long-term negative effect on investment?
Bailey says there will be companies who come through the crisis with higher debt levels than they expected.
Some of those firms have quite high cash balances, so will be able to repay those precautionary loans quite quickly, he predicts.
But others may need a ‘delicate’ workout procedure to get debt levels down.
For medium and large companies, that could include ‘equity provision’ (I think he means issuing new shares, eg: though a rights issue, to bring debt down)
Q: So are there zombie companies out there who will have a damaging impact on the economy?
Deputy governor Dave Ramsden says this question has been rumbling since the last financial crisis – is productivity being dragged down by struggling firms who are just keeping afloat thanks to low interest rates?
Some of the firms who have taken on debt this time will not be…