TY  - UNPD
A1  - Boot, Arnoud
A1  - Carletti, Elena
A1  - Haselmann, Rainer
A1  - Kotz, Hans-Helmut
A1  - Krahnen, Jan Pieter
A1  - Pelizzon, Loriana
A1  - Schaefer, Stephen
A1  - Subrahmanyam, Marti G.
T1  - The coronavirus and financial stability
T2  - SAFE policy letter series ; 78
N2  - The spreading of the Covid-19 virus causes a reduction in economic activity worldwide and may lead to new risks to financial stability. The authors draw attention to the urgency of the targeted mitigation strategies on the European level and suggest taking coordinated action on the fiscal side to provide liquidity to affected firms in the corporate sector. Otherwise, virus-related cashflow interruptions could lead to a new full-blown banking crisis. Monetary policy measures are unlikely to mitigate cash liquidity shortages at the level of individual firms. Coordinated action at European level is decisive to prevent markets from losing confidence in the resilience of banks, particularly in countries with limited fiscal capacity. In contrast to the euro crisis of 2011, the cause of the current crisis does not lie in the financial markets; therefore, the risk of moral hazard for banks or states is low.
T3  - SAFE policy letter - 78 
KW  - coronavirus
KW  - financial stability
KW  - banking
KW  - strategies
Y1  - 2020
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/53406
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-534068
UR  - https://safe-frankfurt.de/de/policy-center/publikationen/detailsview/publicationname/the-coronavirus-and-financial-stability.html
PB  - SAFE
CY  - Frankfurt am Main
ER  -