December 14, 2020 "Policy makers must act urgently, as the solvency crisis is already eroding the business sector in many countries. The problem is worse than it appears on the surface, as the massive support for liquidity, and pure and simple confusion caused by the unprecedented nature of this crisis are masking the full extent of the problem. We have a cliff of insolvencies, especially of small and medium-sized enterprises, arriving in many sectors and jurisdictions, as support programs run out and assets existing net is consumed by losses ".
This was stated by Mario Draghi, co-president of the G30 Working Group and former president of the ECB.
For Draghi, a balance needs to be found to support businesses that are able to emerge from the pandemic, while ensuring that the banking system remains healthy and able to grant credit to households and businesses and to support the recovery.
He then stressed: "We must focus on maintaining the financial system's ability to sustain credit and offsetting unwanted consequences for the financial system and bank stability."