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Definition

A company that cannot pay the interest on its debts. The term originates in Japan where companies were sustained by the banking sector during the "lost decade" in the 1990's. Subsequently, in the sub-prime crisis of 2008, the term was used to describe those companies which were deemed to be "too big to fail" and were supported by government bailouts. With the advent of quantitative easing (Q/E) after 2008 and the return to Q/E during the COVID-19 crisis in 2020 there are more zombie companies, especially in the tech sector, in America. Clearly, zombie companies are unsustainable in the longer term.

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