No wave of bankruptcies in Switzerland for the time being; support measures appear to have had an effect

There is great concern that the coronavirus crisis will trigger a wave of corporate bankruptcies in Switzerland. Analysis conducted by the KOF Swiss Economic Institute in collaboration with Bisnode D&B now shows that there are as yet no signs of such a wave of bankruptcies. In recent months the number of bankruptcies has not been significantly higher than expected in any major region or sector of the economy. On the contrary: between March and July of this year there were 21 per cent fewer bankruptcies than in the same period of last year. In the construction industry and the artisan trades there were as much as 32 per cent fewer bankruptcies on average. The economic slump was evident across all major regions, albeit to varying degrees. Whereas there were almost 50 per cent fewer bankruptcies in Ticino, there were only 10 per cent fewer in Central Switzerland.

One reason for the generally low level of bankruptcies could be the support measures taken in connection with the coronavirus crisis – such as easier access to short-time working, the COVID-19 lending programme and the ban on debt collection which remained in force until the beginning of April. It is still too early to sound the all-clear, however, as some bankruptcies are merely likely to have been postponed by these measures. Even after past economic crises, moreover, the incidence of bankruptcies has increased gradually rather than abruptly.