Zombie firms are poorly performing firms that are unable to service their debt obligations over a prolonged period. They have a marginal return on capital that is below the risk-adjusted market cost of capital (Schivardi et al. 2022), and often survive due to bank support. Caballero et al. (2008) identify zombie firms as those that […]
It is well understood that real estate lending booms can cause financial crises and weak recoveries (Schularick et al. 2014). Raising house prices that go hand-in-glove with soaring mortgage borrowing should, therefore, be seen as a cause of concern. Taking the UK as a case in point, Figure 1 shows how over the past three […]
Climate-related risks are now a recognised factor in financial decision-making and therefore in the prices of assets. Two types of climate-related risks are generally recognised: transition risks and physical risks. Transition risks arise because of changes in policies, technologies, and consumer and investor preferences that are already occurring and will need to occur in the […]
