The much improved profitability can help finance expansion directly out of internal funds or indirectly by supporting firms’ borrowing capacity. Furthermore, firms will be able to  4  BIS Review 13/2004  draw on their liquid assets that have accumulated over the past couple of years.
And given the successful efforts to pare costs, firms are set to benefit from new investment in plant and equipment. Perhaps the biggest hurdle still facing many corporations is the burden of underfunding in their defined-benefit (DB) pension plans, but even here we have seen some improvement from the situation a year ago.