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Marco Valli
Head of Macro Research
Chief European Economist
UniCredit Bank, Milan
Piazza Gae Aulenti, 4 - Tower C - MRE4
I-20154 Milan
+39 02 8862-0537

Marco Valli is Head of Macro Research and Chief European Economist at UniCredit. Previously, he served as Chief Italy Economist from 2006 until mid-2010. Before joining UniCredit in 2004, he worked as a European economist at Fideuram SGR. Marco has a degree in economics and a master's in quantitative finance from Università Bocconi in Milan. He co-authored the study Global Inflation – The Ghost in the Machine?, which was awarded the Rybczynski Prize by the Society of Business Economists in London for the best piece of business economics writing in 2007.

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84a31cdc5cf015ac74ba8c14d9f2a2213fdea4eadd78b6b94efeff702b8d36e4;;[{"layout":"detailed","uid":24294,"publicationDate":"15 Jan 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_178951.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJLmrrwvNVFgwzJJ8yCNS1Do=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Spike in indebtedness overstates the vulnerability of eurozone firms ","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week shows the evolution of two measures of indebtedness of eurozone non-financial corporations (NFCs). Gross debt includes loans and debt securities, while net debt subtracts from gross debt the liquid assets held by firms, namely currency and deposits. <\/li><\/ul><ul class=\"ucrBullets\"><li> The pandemic has pushed up both gauges. However, gross debt (as a share of gross value added) has increased significantly more and currently stands at its highest level on record, while net debt remains comfortably within the range prevailing since the credit crisis of 2008-09, and clearly below the peak reached in the aftermath of the sovereign-debt crisis. <\/li><\/ul><ul class=\"ucrBullets\"><li> Gross debt tends to be used more frequently in economic analysis, but we argue that at this juncture, net debt provides a more informative picture. As a matter of fact, the increase in net indebtedness since the outbreak of COVID-19 has been totally driven by a denominator effect (i.e. the contraction in gross value added), while the numerator \u2013 the level of net debt \u2013 has hardly changed. The reason is that eurozone firms have boosted their borrowing during the pandemic mainly to increase their liquidity buffers for precautionary motives amid the lack of visibility. Therefore, the spike in gross debt overstates the vulnerability of eurozone firms to increased leverage. <\/li><\/ul><ul class=\"ucrBullets\"><li> As a note of caution, one should consider that our chart provides an aggregate picture, while the pandemic has created unprecedented divergence among sectors. Those businesses most hit by COVID-19 (such as tourism and transport) are likely to have suffered a much more significant deterioration in their financial position than is suggested by our chart.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","hash":"84a31cdc5cf015ac74ba8c14d9f2a2213fdea4eadd78b6b94efeff702b8d36e4","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"-1","showcompanies":"-1","showcountries":"-1","showcurrencies":"-1","nodate":"0","notitle":"0","noproduct":"0","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"400","synopsisexpand":"1","shownav":"0","limit":"1"}}]