{"id":427960,"date":"2020-04-22T00:00:00","date_gmt":"2020-04-22T00:00:00","guid":{"rendered":"https:\/\/ieb.ub.edu\/how-will-covid-19-affect-banking\/"},"modified":"2020-04-22T00:00:00","modified_gmt":"2020-04-22T00:00:00","slug":"how-will-covid-19-affect-banking","status":"publish","type":"post","link":"https:\/\/ieb.ub.edu\/en\/how-will-covid-19-affect-banking\/","title":{"rendered":"How Will Covid-19 Affect Banking?"},"content":{"rendered":"\n

The Barcelona Institute of Economics (IEB) has published the third of its analyses on the impact of Covid-19. In the latest Info IEB ( http:\/\/ieb.ub.edu\/en\/publication\/info-ieb-banca-y-covid-19-numero-35-abril-2020\/<\/a> ) revolves around banking, authored by Antoni Garrido Torres, Professor of Economics at the University of Barcelona (UB).<\/p>\n\n\n\n

The author observes at\nthe onset that European banks currently maintain much higher liquidity and\ncapital levels than they had before the financial crisis. Moreover, in\nanticipation of market tensions, the ECB has adopted a package of measures that\nwill inject more liquidity and capital into the system, which is fundamental at\nthe moment.<\/p>\n\n\n\n

The big question is if\nthese measures will ensure sufficient funding in the eurozone, which will\ndepend heavily on the duration of the crisis. Given this, it should not be\nruled out that more heterodox measures, such as deficit monetisation, should be\ntaken.<\/p>\n\n\n\n

With regard to Spanish\nbanking, the analysis points out that the current starting position to deal\nwith this crisis is much better than in the previous one, which was a\nsignificant part of the problem, as the document points out. On the other hand,\nthe author states that “the public guarantee program launched by the\ngovernment will not cause a significant and immediate increase in the\ndelinquency of Spanish banks<\/em>“. However, falling demand for credit (particularly\nthose linked to the purchase of cars and housing) and lower commission income\nwill “reduce the income of entities<\/em>“. For the time being, a\nwidespread reduction in personnel or staffing has been ruled out, according to\nthe Professor the result will be “a further contraction of all\nprofitability margins, which may cause some entities to end the financial year\nby recording losses<\/em>“.<\/p>\n\n\n\n

However, the study\nconcludes that the impact will not be homogeneous. The most diversified\nentities (geographically and operationally) and\/or less exposed to the sectors\nmost affected by the global economic slowdown such as hotel or energy will better\nweather the emergent situation. The gradual closure of the emissions market,\nthe drop in prices and in the much-needed concentration of available resources\nin crisis management suggest, according to the author, to leave until later\npotential mergers with other entities.<\/p>\n\n\n\n

The document also notes that being forced\nto learn new channels to relate with banking institutions will enable them to\naccelerate plans to reduce their branch networks that have been put in place in\nrecent years.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Barcelona Institute of Economics (IEB) has published the third of its analyses on the impact of Covid-19. In the latest Info IEB ( http:\/\/ieb.ub.edu\/en\/publication\/info-ieb-banca-y-covid-19-numero-35-abril-2020\/ ) revolves around banking, authored by Antoni Garrido Torres, Professor of Economics at the University of Barcelona (UB). The author observes at the onset that European banks currently maintain much […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-427960","post","type-post","status-publish","format-standard","hentry","category-sin-categorizar"],"acf":[],"_links":{"self":[{"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/posts\/427960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/comments?post=427960"}],"version-history":[{"count":0,"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/posts\/427960\/revisions"}],"wp:attachment":[{"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/media?parent=427960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/categories?post=427960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ieb.ub.edu\/en\/wp-json\/wp\/v2\/tags?post=427960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}