(Bloomberg) — Policy makers are facing the most economically challenging part of the Covid-19 crisis in avoiding the creation of “zombie” companies, according to the Bank for International Settlements Ultra-easy monetary and fiscal support is helping companies avoid a liquidity crunch after the pandemic closed down businesses and demand collapsed. But that stance bears risks longer-term, said Claudio Borio, head of the Basel-based institution’s Monetary and Economic Department. “There’s a delicate balance to be struck between on the one hand withdrawing it too early, which will obliviously have short-term costs in terms of economic activity, and withdrawing it too late, which will mean that it will not favor necessary structural adjustments,” he said on Monday. Officials in Europe and the U.S. have unleashed unprecedented easing in response to the Covid-19 outbreak, which has pushed up equity markets even as economies face their deepest recession in decades. While the liquidity measures have helped companies stay afloat, there are concerns they may also be creating a swathe of uncompetitive firms that hold back investment and innovation. “The real challenge is to distinguish between viable and non-viable firms, which, given the uncertainty about future demand patterns, is not straightforward,” Borio said. Nick Note: Who is the arbitrator of what is a viable company. The answer is the market place. And it is cruel task master. Government cannot decide, special interest groups either. If they cannot cut the mustadr let them go. We are ending capitalism. The subsidized companies destroy the viable ones. You can’t afford the rent you lose the apartment. It might get them off their asses and the happy checks and become productive again. We are going down the road where we are subsidizing colossal losers. Its a new world order. And jet planes, and stadiums, most restaurants, hotels, college campuses have to be redesigned and most will be gone. Look the thinking here is to hold on until the magic vaccine the golden shot is invented, distributed and the really hard part. really really really works. My way is smarter… Assume their will be no vaccine (since their is not one) and act accordingly. And if if if their is a WORKING vaccine adjust your model according to what ever reality GOD send our way. But betting the capitalist system on a vaccine is beyond stupid…..