Companies in the main advanced countries are running significant financial surpluses, on average of around 2.5% of GDP (Chart 13). Pre-crisis, companies were running financial deficits of around 1% of GDP. The cash position of the corporate sector is even more striking, with large UK corporates’ stock of cash up by over 40% since 2006. But as among households, this picture of aggregate health conceals a long tail. A number of companies appear to be struggling to meet interest payments even at ultra-low interest rates. The fraction of companies whose profits do not cover interest payments has actually risen slightly since the crisis; it is currently around one third (Chart 14). Within some sectors, such as property, debt-servicing capacity has deteriorated sharply. Despite these balance sheet headwinds, the macroeconomic situation today is far better than at the time of the Great Depression – with one exception. The exception is government finances. Despite the much smaller fall in GDP, UK government debt-to-GDP ratios have deteriorated more than in the 1930s (Chart 15). This pattern is mirrored across advanced economies. The IMF expect debt-to-GDP ratios in the G7 economies this year to breach 100% of GDP for the first time since the Second World War (Chart 16). 1  Perhaps because banks’ asset measurement is not distorted by errors in risk weights and equity measurement is forward-looking and not distorted by different capital definitions – see Haldane (2011). BIS central bankers’ speeches  3  There is no magic number for debt ratios.
François Villeroy de Galhau: With economic recovery underway in Europe, what monetary policy? Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at a lunch-debate at the Centre des Professions Financières, Paris, 28 September 2017. * * * Accompanying slides  Ladies and gentlemen1, It is a pleasure to be here with you for this lunch-debate of the Centre des Professions Financières. I would especially like to thank your chairman Michel Pébereau for his kind invitation. Today, I am delighted to be able to speak to you on a highly topical subject: monetary policy in Europe in the context of economic recovery. The prospect of a very gradual normalisation of our monetary policy gives rise to concerns and expectations. I will begin by focusing on what our accommodative monetary policy has already achieved today, before talking about prospects for the future. I. What is the situation today? Economic recovery in the euro area is here [slide]. It is robust and broadly based across  countries and sectors. Our latest ECB forecasts2 confirm this: growth should stand at 2.2% in the euro area in 2017, i.e. a significant upward revision of 0.3 point compared with June’s forecast of 1.9%. This means that for the second consecutive year, euro area growth will be comparable to that of the United States.