Covid -19 pandemic is damaging economies across the world including financial markets, institutions in all possible dimensions. For banks in particular the pandemic generates multifaceted crises mainly through increase in default rates.
“This is likely to be worse in developing economies with poor financial market architecture. The pandemic could substantially threaten the performance, survival and growth of banks in developing countries in particular in those where banks play a prominent role in the economy,” Jonathan Alles Managing Director and CEO -Hatton National Bank told at the 37th Annual Conference of Asian Bankers Association (ABA) .
Alles said the global banking sector is facing monumental challenges of helping to keep the economy running during lockdowns and help recover while the pandemic is happening. Banking sector will be needed for a strong recovery looking beyond the immediate threats as ongoing effects of COVID-19 pandemic are difficult.
In a low interest, low profitability environment where the risk of a third or even fourth wave remains, the banks will need to continue playing a significant role in shaping the recovery and helping their customers rebuild their financial security and businesses.
He said further that providing support to the government and customers are crucial during the crisis and this will require banks to deploy their tools that they have developed since the 2018 financial crisis.
“It needs a coherent, extensive response to uncharted territory. I strongly believe that ABA will have a role to play in helping our members address challenges before us,” Alles said.
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