So far, supportive policies such as loan guarantees and moratoria, together with capital relief provided by supervisory authorities, have also been effective in averting a liquidity crisis, as indicated by the sharp improvement in the quick ratio – a measure of a firm’s ability to meet its short-term obligations with its most liquid assets (Chart 13).
This has also allowed firms to finance working capital and compensate for diminished revenues, which has been fundamental for heading off a wave of insolvencies and permanent damage to productive capacity, as well as protecting jobs. [13] At the same time, firms have been taking on more debt, as reflected in leverage ratios (Chart 14).