Corporate collapse is in the air once again; loss and recrimination stalks the business world as bankers switch from being money marketers to capital conservers.
Just how much risk capital will be lost during this credit squeeze is unknowable, of course, but it’s unlikely that the squeeze on equity is over yet. Unless there is a sudden re-liquification of the banking system, of which there is no sign yet, more equity will be lost in the scramble to recover debt and some companies will go to the wall.
But it’s to be hoped that we don’t emerge from this crisis with a worse corporate governance system than we entered with. It’s already bad enough.
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