Zombie company
Encyclopedia
Zombie company is a media term for a company that needs constant bailouts in order to operate. There are several types of zombie companies. The term regained popularity in the media during 2008 for companies receiving bailouts from the U.S. Troubled Asset Relief Program (TARP). A 2002 New York Times article about Japanese companies kept on "life-support" with loans include a headline that stated, "They're Alive! They're Alive! Not!; Japan Hesitates to Put an End to Its 'Zombie' Businesses."
s" stalking a lost decade.
Usage
"Zombie company" is used to describe a pathology in an economy where a failing company continues to operate with government support, but cannot stand on its own. The term traces to Edward Kane's explanation of the situation of insolvent savings and loan associations in the 1980s and of Japanese banks in in the early 1990s. During the financial crisis of February 2009, Newsweek Magazine gave a down arrow to banks in its conventional wisdom watch section saying, "restructure them now, before we get Japanese-style "zombie bankZombie bank
A zombie bank is a financial institution that has an economic net worth less than zero but continues to operate because its ability to repay its debts is shored up by implicit or explicit government credit support...
s" stalking a lost decade.