LIBERTY STREET ECONOMICS
The Banking Industry and COVID-19: Lifeline or Life Support?
Madeline Finnegan, Sarah Ngo Hamerling, Beverly Hirtle, Anna Kovner, Stephan Luck, and Matthew Plosser
By many measures the U.S. banking industry entered 2020 in a healthy state. But the pandemic and associated economic disruptions have caused unemployment to skyrocket and many businesses to suspend or reduce operations. The authors consider the implications of the pandemic for the stability of the banking sector, including the potential impact of dividend suspensions on bank capital ratios and the use of banks’ regulatory capital buffers.
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