Elena Carletti, Jan Pieter Krahnen, et al
The virus epidemic carries the risk of a financial pandemic, which may even spiral into a global phenomenon. This SAFE policy letter from the Leibniz Institute for Financial Research argues for some form of a joint and mutual insurance scheme at the European level, compensating firms for crisis-induced cashflow shortfalls, though not for “legacy” poor performance, and thus limiting (or avoiding) the knock-on effects in production, consumption and banking.
