The Covid 19 pandemic bears serious economic consequences, which is why the Federal Council has taken numerous measures in recent weeks. Not only has billions in liquidity been made available to Swiss companies quickly and unbureaucratically (in cooperation with the banks), but short-time working compensation has also been expanded massively. Nevertheless, there are now calls in politics and academia for even more extensive, comprehensive corporate rescue programmes
Such critics argue state funds should be used to guarantee corporate profits, carry out bailouts or support companies with free handouts. Such solvency aid schemes should be rejected from a regulatory perspective. They lead to false incentives and tend to punish those companies that have prepared themselves financially for difficult times with liquidity and equity cushions.
In addition, bailouts would undermine private sector solutions such as debt for equity swaps, capital increases and other types of recapitalisation Finally, comprehensive state solvency support also harbors the inherent risk of inefficient structural maintenance: the idea of being able to “freeze” the economy with full insurance worth billions is fundamentally misguided.
