Banks and Their Role in Leading Economic Growth During the COVID-19 Pandemic

Key Ideas

• 1The pandemic caused a deep synchronized recession and changed consumption, production, employment, and business models.
• 2Banks can support affected economic activity, but rising defaults may test capital adequacy and resilience.
• 3Regulators and banks should use prudential buffers carefully, maintain transparent risk disclosure, and avoid actions that weaken capital during the crisis.
• 4Governments should design targeted support, protect vulnerable groups, preserve jobs where possible, and support viable businesses rather than inefficient pre-crisis structures.
• 5Public-private partnership remains important for infrastructure, continuity of essential services, and economic recovery.