With the future of many coronavirus hit firms in their hands, British banks, still scarred by the financial crisis, are worried that they are being asked by a desperate government to make loans that will never be repaid, Reuters reported. This caution, combined with the challenges of an unprecedented demand for loans, is testing the British public’s fragile faith in the lenders, which have spent a decade trying to rebuild their battered reputations and capital positions.

Britain’s largest energy supplier Centrica cancelled its 2019 dividend and cut costs in anticipation of an increase in non payments by customers and a drop in demand due to the COVID-19 outbreak, sending its shares to record lows, Reuters reported. The government has ordered sweeping measures to slow the spread of the new coronavirus, shutting down much of the economy and raising the prospect of mass job losses. Shares in the company hit 34.35 pence on Thursday, morning, their lowest level since the company’s inception in 1997.

For emerging economies, coronavirus struck first through the financial markets. Long before the numbers of cases and deaths in these countries began to spread alarm, many emerging markets experienced a sudden halt in foreign investment inflows, the Financial Times reported in a commentary. Overseas investors have taken $95bn out of EM stocks and bonds since late January, according to the Institute of International Finance, dwarfing the withdrawals that followed the onset of the global financial crisis in September 2008.

London-based hedge fund Cheyne Capital’s total return credit fund lost almost a quarter of its value last month as debt markets convulsed over the impact of the deadly coronavirus pandemic, Bloomberg News reported. The fund referred to as TRCF December 2024 lost 24.7% on top of a 5.3% decline in February, according to an investor letter seen by Bloomberg News. It mainly focuses on investment-grade companies which are less likely to default on their debts and includes bets using credit derivatives.

France is preparing fiscal stimulus focusing on investment and financial aid for industrial sectors including the automotive industry, Finance Minister Bruno Le Maire said, giving the first indication of how the government plans to reboot the economy after the coronavirus crisis, Bloomberg News reported. Like other European countries, France has so far focused the heft of emergency spending on benefits for furloughed workers and a vast loan guarantee program to prevent bankruptcies. But the government is now working on a plan for when the confinements are lifted and businesses reopen.

The Central Bank has warned that the coronavirus crisis is likely to blow a €22 billion hole in the State’s finances and could see half a million people losing their jobs, The Irish Times reported. In its latest quarterly bulletin, published on Friday, it says lost tax revenue and increased spending on various support schemes will see the exchequer move from a €2.2 billion surplus to a €19.6 billion deficit this year. It predicts the crisis will lead to the loss of up to 500,000 jobs as the economy shrinks by 8.3 per cent.

German restaurant franchise company Vapiano said on Thursday it had applied to start insolvency proceedings, becoming another high street casualty of a national coronavirus lockdown that is expected to remain in force for weeks, Reuters reported. Parent company Vapiano SE said it had filed for insolvency at a district court in Cologne and was evaluating whether insolvency applications would need to be filed for its group subsidiaries.

Bankruptcies among Swedish restaurants and hotels jumped by 123% in March as measures to contain the coronavirus pandemic stopped people from making trips and socializing, Bloomberg News reported. The transport sector was also hit hard with bankruptcies rising by 105% in March compared to the same month a year ago, according to a statement from the business and credit reference agency UC. The overall number of companies going bust in Sweden last month increased by 9%, it said.

Almost one million people have claimed “universal credit” welfare payments in the U.K. in the past two weeks, exposing the massive economic hit from Boris Johnson’s coronavirus lockdown, Bloomberg News reported. Between March 16 and March 31, 950,000 people successfully applied for universal credit payments, up from about 100,000 in a normal two-week period, according to government figures.

Record numbers of hotels and restaurants went bankrupt in March in Sweden as customers stayed at home to avoid spreading the coronavirus, figures from credit information firm UC showed on Wednesday, Reuters reported. Bankruptcies in the restaurant and hotel sector shot up 123% in March compared with the previous year, with the transport sector also seeing a big jump, up 105%. “In the next stage, this is going to hit banks and real estate firms which will have to negotiate debt write-downs with these firms,” Richard Damberg, economist at UC said in a statement.