Thanks To Bank Regulations And Central Bank Actions, Banks Have Been Resilient Enough To Lend

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Thanks To Bank Regulations And Central Bank Actions, Banks Have Been Resilient Enough To Lend

Despite the severity of the coronavirus crisis, which in many ways has been far worse than the 2007-2009 global financial crisis (GFC), internationally active banks have been more resilient than in the run-up to the financial crisis and the immediate aftermath. Internationally active banks are better and more capitalized than they were during the GFC. That level of capitalization put them in a better position to withstand the economic fallout of their borrowers and counterparties in this severe crisis.

Critics of bank regulations or of recent central bank actions to provide respite to Main Street would do well to read two research pieces released today by the Bank for International Settlements (BIS) in its Quarterly Review. Rapid and forceful responses by central bank actions during the pandemic greatly aided banks to be resilient and also helped those sectors in the economy adversely impacted by partial or complete lockdowns. According to BIS economists, Frederic Boissay, Stijn Claessens, and Alan Villegas "Central banks have responded swiftly