TY  - UNPD
A1  - Schularick, Moritz
A1  - Steffen, Sascha
A1  - Tröger, Tobias
T1  - Bank capital and the European recovery from the COVID-19 crisis
T2  - SAFE white paper ; No. 69
N2  - Do current levels of bank capital in Europe suffice to support a swift recovery from the COVID-19 crisis? Recent research shows that a well-capitalized banking sector is a major factor driving the speed and breadth of recoveries from economic downturns. In particular, loan supply is negatively affected by low levels of capital. We estimate a capital shortfall in European banks of up to 600 billion euro in a severe scenario, and around 143 billion euro in a moderate scenario. We propose a precautionary recapitalization on the European level that puts the European Stability Mechanism (ESM) center stage. This proposal would cut through the sovereign-bank nexus, safeguard financial stability, and position the Eurozone for a quick recovery from the pandemic.
T3  - SAFE white paper series - 69 
KW  - bank capital
KW  - financial stablity
KW  - COVID-19
Y1  - 2020
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/54612
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-546124
UR  - https://safe-frankfurt.de/policy-center/policy-publications/policy-publ-detailsview/publicationname/bank-capital-and-the-european-recovery-from-the-covid-19-crisis.html
IS  - June 2020
PB  - SAFE
CY  - Frankfurt am Main
ER  -