Large and Small Companies Exhibit Diverging Bankruptcy Trends

摘要

Publicly traded companies filed for bankruptcy at a record pace in 2001. This trend reflects a more challenging economic environment but nevertheless stands in contrast to overall business bankruptcy trends. Profits at large companies have declined while leverage has increased, and losses from large credits have risen at insured institutions. Now the question is the degree to which credit losses may spread from large company credits to small company credits and consumers and what effect this may have at insured institutions that rely on such lending as a source of income.