In early March 2020, the World Health Organization (WHO) declared the outbreak of COVID-19 as a pandemic originating in Wuhan, China. The pandemic situation caused by COVID-19 has led to an abrupt increase in uncertainty that can threaten both economic growth and financial stability. According to the International Monetary Fund (IMF), quantifying the economic impact of the current COVID-19 pandemic situation is complex, resulting in great uncertainty about the economic outlook and associated risks.
Measures to mitigate the impact of COVID-19 on the banking sector
In this context, governments, regulators, supervisors and central banks have issued measures and recommendations to mitigate the economic impact of COVID-19 on the banking sector through economic policies, specific fiscal measures and monetary and financial stability policies that will be vital to help sustain the global economy.
This Technical Note sets out the main general and financial measures adopted by governments, regulators and supervisors to mitigate the economic impact of the COVID-19 outbreak.
A set of economic and financial measures to mitigate the economic impact and reduce the risks arising from the outbreak of COVID-19. The measures adopted by the ECB and the Fed are noteworthy due to their impact on the financial sector at a global level.
Scope of application
Measures and recommendations taken by governments, regulators, supervisors and central banks as COVID-19 expands are aimed to all competent authorities, credit institutions, investment firms and financial conglomerates.
- Measures adopted by Governments. The Governments of different countries in Europe, USA and Latin America have taken urgent measures to address the health crisis and economic impact of the COVID-19 outbreak.
- Financial measures. Financial supervisors and regulators have published gradually, due to the different level of spread of COVID-19, differente measures and recommendations aimed at maintaining financial stability.
- Impacts on the economy and the financial sector. The measures issued by governments, regulators and supervisors can result in both measures that impact on the general economy, for example the reduction of consumption due to the restriction of the freedom of movement of persons; and measures that impact directly on the financial sector, for example an increase in the liquidity of credit institutions by making the requirements of the regulatory framework more flexible. A projection of possible impacts on economic indicators is also included.
This information will be updated in the coming days as new measurements are published for the geographies already analysed, as well as for the rest of the relevant geographies for the Firm.
Download the technical note by clicking here (document available in english).