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North America Leads First Post-Crisis Jump in Global Insolvencies - Wall Street Journal

Corporate insolvencies are expected to rise globally for the first time in 10 years, with North America leading the trend, due to a more challenging economic environment and heightened uncertainty surrounding trade policy, according to a new research report, WSJ Pro Bankruptcy reported. The first annual upturn in corporate insolvencies in advanced markets since the global financial crisis in 2008 and 2009 comes as the worldwide economy slows down, business investment growth remains subdued and financing risks rise due to ongoing trade tensions, according to a report released yesterday by Dutch trade finance insurer Atradius NV. Business failures globally are expected to grow 2.8 percent this year and increase slightly again by 1.2 percent in 2020, Atradius said. The higher forecast for corporate insolvencies is primarily due to worse-than-expected insolvency developments in North America. Atradius has “a built-in warning system” that requires its insurance customers to report to the company late payments of more than 60 to 90 days from their buyers of services or commodities, said David Huey, president and regional director of U.S., Canada and Mexico for Atradius. The region is forecast to see the highest insolvency growth among all regions, with a 3.2 percent increase in 2019 and 1.7 percent in 2020 as economic momentum dwindles and companies increasingly face the costs of rising trade tensions, Atradius said in the report.

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