Corona and financial stability 3.0: Try equity - risk sharing for companies, large and small

Bericht

This policy letter adds to the current discussion on how to design a program of government assistance for firms hurt by the Coronavirus crisis. While not pretending to provide a cure-all proposal, the advocated scheme could help to bring funding to firms, even small firms, quickly, without increasing their leverage and default risk. The plan combines outright cash transfers to firms with a temporary, elevated corporate profit tax at the firm level as a form of conditional payback. The implied equity-like payment structure has positive risk-sharing features for firms, without impinging on ownership structures. The proposal has to be implemented at the pan-European level to strengthen Euro area resilience.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SAFE Policy Letter ; No. 81

Classification and Topics

• Classification: Wirtschaft
• Subject: Coronavirus ; Financial stability ; Risk sharing ; Policy measures in the EU

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Boot, Arnoud W. A. ; Carletti, Elena ; Kotz, Hans-Helmut ; Krahnen, Jan Pieter ; Pelizzon, Loriana ; Subrahmanyam, Marti G.
• Event: Veröffentlichung
• (who): Leibniz Institute for Financial Research SAFE
• (where): Frankfurt a. M.
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/215544
• Last update: 10.03.2025, 11:45 AM CET