Covid crisis : impacts and responses
Covid crisis : impacts and responses
Context
We are experiencing with the Covid-19 pandemic an unprecedented crisis, pushing the global economy into the worst recession since the Great Depression. Central Banks and governments have taken a wide range of measures to sustain the supply of credit to the real economy, support financial intermediation, and preserve the resilience of the global financial system. But this exogenous shock is placing the financial system under considerable strain.
The Covid-19 outbreak is however more a powerful amplification factor of a latent debt crisis rather than a cause in itself of the current situation. Indeed, lasting zero – and even negative – interest rates have allowed businesses, States and leveraged investors to take on unreasonable debts, making them vulnerable to deteriorating economic and market conditions.
The resulting excess liquidity in the financial system has generated bubbles of financial assets and their bursting, thus further weakening the financial system and hampering economic recovery.
Strong policy responses and international cooperation are required to tackle the unprecedented health, monetary, economic, and financial stability challenges posed by the Covid-19 pandemic. Fiscal discipline and solidarity will be needed in the euro zone, where the heterogeneity of deficits and public debt, and therefore of tax margins, is particularly marked.
Contributions to the policy debate
Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)
Key Eurofi
documents
Eurofi policy notes
Reflections on the health and financial crisis - March 2020 new
Views on the responses to the Covid-19 crisis - April 2020 new
Public and private
sector views
Public authority views
EU Croatian Presidency views
Z. Marić - Priorities of the Croatian EU Presidency in the financial area - April 2020 new
Policy responses
K. Knot - De Nederlandsche Bank - A new impetus for international cooperation - April 2020 new
P. M. Thomsen - IMF - Europe’s Response to the COVID-19 Crisis - April 2020 new
S. Župan - Croatian Min of Finance - Towards a future-proof EU fiscal framework - April 2020 new
Monetary policy impacts
Industry views
Policy responses
J. Gual - Caixabank - Europe’s greatest challenge - April 2020 new
Dr. J. Haegeli - Swiss Re - Post-crisis recovery agenda: we need it now - April 2020 new
Dr. K-P. Schackmann-Fallis - DSGV - Solidarity and Stability in Europe - April 2020 new
Implications for the financial sector
J. Lemierre - BNP Paribas - CoVid-19: banks are part of the solution - April 2020 new
M. Ronner - UBS - Decisive action for a strong European banking sector - April 2020 new
S. Revell - BNY Mellon - Thoughts on Covid-19 – the importance of people - April 2020 new
B. Sibbern - Nasdaq - Cooperation prevails – through and beyond Covid-19 - April 2020 new
J. Viñals - How banks respond to the crisis now is critical to the global recovery - April 2020 new
Monetary policy impacts
J-J. Bonnaud - Eurofi - For a new Bretton Woods - April 2020 new