Our current assumption is that the virus-related disruption is not severe enough to prompt a widespread business debt crisis. But if the virus triggers a sharper drop in profits or a bigger rise in borrowing costs than we envisage, then these pockets of vulnerability could blow up. Although the global banking system appears to be better placed to deal with such turbulence now than at the time of the global financial crisis, at the very least this could exacerbate any virus-related global downturn.
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