№ 3/2020

Fìnansi Ukr. 2020 (3): 65–79https://doi.org/10.33763/finukr2020.03.065

MONETARY POLICY

BORTNIKOV Gennadiy ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0001-8388-6721

Central banks and banking community responsive measures to the coronavirus epidemic

Central banks, as monetary and regulatory bodies, encourage commercial banks to use their capital and liquidity buffers to address the problems caused by the effects of the coronavirus. These capital and liquidity buffers have been designed to provide banking organizations with the resources to support their economies in adverse situations and to allow banks to continue providing their households and businesses with uninterrupted, full and quality service. Therefore, government regulators support banking organizations that choose to use their buffers for capital and liquidity to accept an acceptable credit risk. Measures to alleviate debt burdens for small and medium-sized businesses and households should be put in place immediately. Fiscal measures aimed at subsidizing those sectors of the economy most affected by the crisis will help improve bank customers’ creditworthiness and reduce defaults. It is necessary to return to the idea of creating a stabilization fund in Ukraine at the expense of additional fees from corporations. The main sources of financing anti-crisis measures are the expenditures of the state budgets, sovereign borrowing. Crisis response areas should be categorized into fiscal and monetary. Major monetary measures include interest rate reduction , broadening banks’ access to liquidity without collateral for government securities and certain types of corporate debt instruments. Oversight measures include lowering capital requirements, covering liquidity, suspending stress tests, allowing banks to restructure loans to injured borrowers, easing credit risk classification and provisioning requirements, limiting on-site supervisory checks. Commercial banks are focusing their efforts on closer communication with customers, strengthening staff health measures, limiting direct contact with customers, temporarily closing some branches, transferring some staff to homework. This crisis will lead to a new transformation of banking business in favor of remote servicing and cashless transactions.

Keywords:banks, banking sector, coronavirus, crisis, anti-crisis measures, central banks, bad loans

JEL: E50, E52, E58, G21

Bortnikov G. . Central banks and banking community responsive measures to the coronavirus epidemic / G. . Bortnikov // Фінанси України. - 2020. - № 3. - C. 65-79.

Article original in Ukrainian (pp. 65 - 79)

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