Our action program for dealing with the COVID-19 pandemic
Corporate Banking Study 8.0: Corporate banking in the wake of the COVID-19 crisis
COVID-19: der schwarze Schwan und seine Folgen
Eine Sonderausgabe unserer European Banking Studie über die Lage und die Aussichten europäischer Banken
How regional banks maintain their ability to act despite COVID-19
“Start fast, never stop”
About work and collaboration in virtual teams during a crisis
The banking world is in the midst of the worst crisis since the financial crash of 2008/2009—this time however, the cause is exogenous. The COVID-19 pandemic has emerged as one of the 21st century’s most serious threats to public health and the global economy. Banks must now respond in a determined, forward-looking and structured manner.
The more complex the situation, the more important it is to follow a structured emergency protocol and make full use of any room for maneuver.
Given the current lack of empirical financial data, banks need to analyze the epidemiological dynamics of Covid-19 and understand their impacts on risk. Moreover, a close eye should be kept on the actions of public institutions, governments as well as the general mood in the banking sector, as the private corporate and banking sectors will not be able to solve this crisis alone.
Rapid identification of the most urgent areas and a rough prioritization of fields of action is critical. Our current analyses suggest that managing credit risk is the most urgent field of action — we therefore recommend conducting a pragmatic (credit) portfolio stress test and regularly updating it with epidemic, political and economic developments as they occur. The results of the stress tests form the basis of your emergency program.
These six measures should be kept in mind in any emergency program:
- Ensure business continuity through virtual leadership
- Apply forbearance and avoid cyclical risk provisioning
- Ensure customer access and communication
- Prepare for a credit run and the distribution of fiscal aid
- Adjust your risk appetite and balance sheet to the new conditions
- Mobilize workout and restructuring capabilities