The total return of investors is dependent not just on the default rate, but on the recovery rate when companies collapse; in other words, how much investors get paid back.

原因在于投资者的总回报不仅取决于违约率，也取决于回收率，换句话说，也就是公司倒闭时投资者能获得的返还有多少。

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To see how this affects funding costs, look at credit default swaps, which typically assume a 40% recovery rate in the event of default.

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CreditSights, a rating agency, says that the European implied default rate, assuming a 20% recovery rate, reached 25% at the end of last year but has since fallen to 15%.

ECONOMIST: Buttonwood

On a break-even basis, this is basically saying that you would start losing money if you started to realize more than a 13% annual default rate for the next 5 years, if you had lower than the historical recovery rates of 40 cents.

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