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Evidence on the impact of the public guarantee and direct aid schemes on Spanish firms during the covid-19 crisis

Author

Listed:
  • Roberto Blanco

    (BANCO DE ESPAÑA)

  • Sergio Mayordomo

    (BANCO DE ESPAÑA)

Abstract

After the outbreak of the COVID-19 pandemic, the economic authorities in many countries took steps to support firms’ liquidity and solvency. This article analyses the effects of two such measures implemented by the Spanish authorities: the public guarantee schemes and direct aid. The results show that public guarantees were essential in enabling many companies to cover their main liquidity needs. In particular, this scheme was especially useful for SMEs and for companies operating in the sectors hit more severely by the health crisis, although it did not significantly alleviate the increased funding needs of companies without prior credit relationships. For its part, direct aid appears to have contributed to a very moderate reduction in the business solvency problems generated by the COVID-19 crisis, since only a small part of the aid was allocated to those companies that needed solvency support.

Suggested Citation

  • Roberto Blanco & Sergio Mayordomo, 2023. "Evidence on the impact of the public guarantee and direct aid schemes on Spanish firms during the covid-19 crisis," Occasional Papers 2317, Banco de España.
    • Handle: RePEc:bde:opaper:2317e
    DOI: https://doi.org/10.53479/34592
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    More about this item

    Keywords

    business solvency; liquidity needs; public aid; COVID-19 crisis; bank credit;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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