COVID 19 Emergency Policy Responses (original) (raw)
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Covid-19 crisis and its impacts on the economic and financial sector
Risk Management Magazine, 2021
The World Bank data confirm that the recovery scenario will be different depending on the type of nation, the fundamentals of its economy, etc.. The Bank of Italy expects a growth of more than 4% for Italy at the end of 2021. The Italian banking system has shown great flexibility in dealing with the coronavirus emergency, taking a completely different form from the last in 2008 recession, when credit institutions were part of the problem. With their new social role, today in fact they are leading players. The health of the banking sector has also changed compared to 2008, with a stronger capital position, underlying the substantial resilience of the ecosystem and a more advanced expertise in NPL management. The role of the banks operating in Italy has been and will be to support firms, households and the growth of the economy with the sound and prudent distribution of credit, the offer of modern and efficient payment services thanks also to new technologies, business advice to compa...
2021
In this Policy Brief, we assess the effectiveness of the macroprudential capital buffers’ release on loans granted to households, implemented in the context of the Covid-19 pandemic. We obtain causal estimates by exploring differences in the availability of regulatory buffers prior to the pandemic shock among European countries and accounting for the time-varying effect of unobservable confounding variables with the synthetic control method. We find evidence that the buffers releases contributed, on average, to mitigate the procyclicality of credit to households, specifically for house purchase and for small businesses purposes. For the aggregate household lending, we find that the average treatment effect for both the release of the CCyB and that of the SyRB were positive. However, the results suggest that, for credit associated to small businesses purposes, only the release of the CCyB had an effect. SUERF Policy Briefs No 165, August 2021
The Impact of COVID-19 on the Financial System
International Journal of Management Studies and Social Science Research, 2022
The COVID-19 pandemic has caused a seismic shift in the functioning, stability, and resilience of the global financial system. This shift is the result of an intricate and multi-dimensional impact that the pandemic has unleashed. Within the context of this unprecedented crisis, this paper sets out to investigate the far-reaching effects of the pandemic on the complex web of financial institutions, markets, and regulatory structures. In this research, we investigate the myriad ways in which the global financial system has been impacted by the COVID-19 pandemic. It investigates the several ways in which the financial industry has been impacted, doing an analysis of the disruptions, difficulties, and adjustments that have surfaced as a result of this extraordinary crisis. The result reveals the negative impact on financial system. Every crisis is unique in its own way. A decade ago, the financial system, and banks in particular, were at the center of the global financial crisis. They were both the primary cause of the crisis as well as the primary catalyst that precipitated it. This time, the crisis is being caused by a pandemic, and the financial sector is being looked at more as a potential element of the solution than as a potential part of the issue. This is obvious from the enormous and rapid influx of new loans to businesses and people during the current crisis, to help them in the face of cash-flow problems. These loans are often backed by state guarantees. From the point of view of the stability of the financial system, this paper analyzes and compares each of these crises. It starts off by going over some of the events, the lessons, and the policy responses that took place during and after the global financial crisis, with a particular emphasis on the banking system. It illustrates how the responses to the global financial crisis left the financial sector significantly better positioned to deal with the COVID issue while also delivering support to the economy as a whole. In its conclusion, it draws some lessons about the stability of the financial system from recent events, including potential areas for further investigation and reform.
Strategy to Combat the Unintended Non-Performing Loans During COVID-19: An Impact Analysis
• Hiteshkumar Thakkar, Makkar, S. & Goyat, P. (2022). “Strategy to Combat the Unintended Non-Performing Loans during Covid-19: An Impact Analysis”, pp. 61–78, Journal of Economic Policy & Research, Volume 17, Issue 2. [ISSN: 0975-8577], 2022
COVID-19-the sorrow of the world, the melancholy of 2020-2021, has not left any sector untouched. It has impacted the world economically and financially. In this paper, we have analysed the economic impact of COVID-19 with a specific attention on Non-performing Loans (NPLs). There has been a catena of policies of Govt. of India to mitigate the impact of the pandemic on Creditors. The reasonable prudent policy would protect a genuine borrower who is not capable pay its due to the adverse effects of pandemic but default can sometimes be intended and deliberate. In this paper we have analysed the probable impact of intended NPL and unintended NPL on the financial system. The objective of the policy makers should be to restrict economy to the efficient NPLs or low risk NPLs. But there can be some evaluating errors and other cross dynamic events which might lead to systemic unintended NPL or moderate risk NPL stage. In such cases, the policy makers should do advanced preparatory planning in order to restrict NPL to moderate risk and not allow the system to reach high risk NPL stage. In this paper we discuss a model which provides framework of intended NPL stage and unintended NPL and the respective consequences of both. Finally, the paper provides policy implication with regards to restraint NPL in the low risk NPL category.
Tribuna Juridica - Juridical Tribune, 2021
This paper examines the moratorium on loan repayments, which was intended to relieve debtors in a difficult situation during the COVID-19 pandemic. In this study, various aspects of such moratoria are critically discussed and compared from an international perspective. Some debtors were significantly hit hard by the pandemic, whereas others were no. But should the moratoria apply to all of them? The free-rider problem, or even harm to some clients, are among the unintended results of the moratorium. Moreover, the loan repayment moratorium has different effects on the traditional banking sector and on P2P lending platforms. Such differences were not discussed sufficiently before adopting the moratoria. The different effects might have a negative impact on some debtors, on some creditors, or on the market and society in general. Along with using some traditional legal research methods, this paper takes a comparative perspective on loan repayment moratoria in different EU countries among. The conclusions of the paper may help regulators and lawmakers prepare more balanced regulations of loan repayments in the next crisis. Future regulations should reflect the perspectives of both debtors and creditors.
Social Science Research Network, 2020
The COVID-19 pandemic has been a global shock with dramatic consequences on debts of governments called to alleviate the economic and social impact of the crisis on firms and households. We explore conditions for the feasibility of (COVID-19 generated) government debt relief, justified in principle by the exogenous characteristics of the shock. We outline several technically and economically feasible ways (involving debt "freezing", debt rescheduling or outright debt cancellation) for achieving this goal and discuss their consequences on moral hazard and the Central Bank balance sheets, as well as their potential impact on CB's independence, reputation and, ultimately, on inflation and exchange rates. We also discuss the distributive concerns which arise when a CB (as in the Eurozone) operates in a Union with several sovereign member states.
The Impact of the COVID-19 on banks in the European Union
2021
Abstract: The economic crisis triggered by the COVID-19 outbreak has severely affected the global economy. The ultimate scale of the recession is yet to be determined, but it is likely to be the most dramatic slump since World War II. The impact of the crisis on the financial sector, especially consumer finance, could almost instantly be observed. The article shows how determination and consistency in regulatory actions counteracts the effects of the pandemic crisis for the banking sector and consumer finance. The conducted research has shown the existence of a number of social phenomena typical of this type of global crisis, such as shopping panic, reduced creditworthiness of households related to loss of income, unemployment and increased crime. At the same time, the actions of financial market regulators turned out to be very effective (no negative structural phenomena occurred in the financial market). The accuracy of the selection of instruments and the speed of action limited the social and financial effects of the pandemic, including a loan repayment memorandum, limiting the cost of consumer loans and supporting the banking sector, which will limit the scale of excessive household debt and consumer bankruptcies, and companies were also supported. The research was conducted on the basis of available literature on the subject, market analyses and a review of regulations implemented at the central level and in individual EU member states.