The writer is a senior fellow at the Center for Financial Studies
The quarantines imposed to halt the spread of Covid-19 threaten to stop the global economy in its tracks. Governments and central banks have already introduced massive support programmes but they are struggling to get cash to companies, and some of the aid is expiring. We can address both problems by making greater use of banks. Here are some practical ways we can do that.
First, use banks to move money quickly into the hands of businesses, especially small and medium sized enterprises, so they can pay suppliers and meet current expenses. To do so, governments should guarantee 100 per cent of credit extended to smaller and micro enterprises and simplify the application process, as Germany and the UK have done.