An interesting view, eh?
E&Y said that although companies are struggling, the number of administrations actually fell last year, despite a 42pc rise in profit warnings among listed companies. It said the mismatch could be explained by a change in attitude among the government and creditors, which have allowed more breathing space for businesses since the onset of the crisis. ……..E&Y argues that because lenders continue to fund these businesses, capital is not being recycled and reinvested as it should be. Although it said the number of zombie companies was difficult to estimate, R3, the business distress specialists, said around 30pc of companies are regularly reliant on their maximum overdraft facility – a good gauge of whether a company is viable.
Everyone loves the creative part of capitalism: few like the destructive part. But we do need both and we\’re not going to get the former unless we allow the latter and thus free up resources to be reallocated….