Question

In: Finance

How banks can survive during Pandemic COVID-19

How banks can survive during Pandemic COVID-19

Solutions

Expert Solution

Banks can survive in covid-19 pandemic as follows-

A. Banks need to properly analyse their liquidity and they need to ascertain the maturity gap analysis and they should be trying to match the maturity of their assets with their liabilities in such scenarios.

B. Banks need a sound monetary policy from their Central banks which is highly supportive of their existing condition and they will be trying to infuse liquidity into the system and they should be decreasing the Reserve requirement

C. Banks also needs to have very high quality of assets on their books so that in the case of any financial sqeeze, they are going to survive due to lower default rate on their assets

D. Banks also needs to sale of their bad assets quickly in order to protect those assets from default and they need to sell these assets to assets reconstruction companies which will be providing them with high liquidity

E. Banks need to form policies in synchronisation with the current monetary policy which will be helpful for them in order to maximize their chances of survival in this crisis

F. Banks need to properly analyse new loans and new deposits because their rates should be not similar to the previous loans as they has been issued during the time of endemic and when should be trying to have optimum security on their hands and they should be trying to only issue loan to those who have high creditworthiness

G. Banks also need to cut upon their overall operational costs which are excessive in nature and they are not leading to additional benefits


Related Solutions

Two introduction paragraphs to start an essay on how small businesses can survive the COVID-19 pandemic?...
Two introduction paragraphs to start an essay on how small businesses can survive the COVID-19 pandemic? Including these subtitles in the second paragraph: The Covid-19 pandemic and government response, The effect of the pandemic on small businesses, the challenges small business owners would face, and lastly, can small businesses survive the Covid-19 pandemic?
Identify shareable resources on how to cope mentally during the COVID-19 pandemic. The resource can be...
Identify shareable resources on how to cope mentally during the COVID-19 pandemic. The resource can be a website, an online pamphlet, breathing exercises, etc. Your resource must be credible. State why you think this resource will help people's mental health. Provide the link to the resource, so your colleagues and I can view it as well. DON'T NEED THE LINK!
List the types of unemployment that can exist in a society. During the COVID-19 pandemic what...
List the types of unemployment that can exist in a society. During the COVID-19 pandemic what type of unemployment do we expect to be prevalent? 150 words minimum
1. At the beginning of the COVID-19 pandemic, interest rates declined at the central banks but...
1. At the beginning of the COVID-19 pandemic, interest rates declined at the central banks but one bank did not pass on the decrease to borrowers citing funding difficulty and shareholder returns as the main reasons. It turns out the CEO of that bank owns 5% of the shares of the bank. Do you think there is an ethical issue surrounding this decision? What might change the CEO’s mind? (200 words)
In a Comprehensive summary, How can small businesses and their workers need to survive covid-19 Beyond...
In a Comprehensive summary, How can small businesses and their workers need to survive covid-19 Beyond paycheck protection program?
Incorporating COVID-19 pandemic into the AS/AD model Q. How can we think of the COVID-19 shock(s)...
Incorporating COVID-19 pandemic into the AS/AD model Q. How can we think of the COVID-19 shock(s) in the AS/AD framework? Explain the intuition and show your arguments in a diagram
How is public health involved in a pandemic like the COVID 19 pandemic?
How is public health involved in a pandemic like the COVID 19 pandemic?
Recently the COVID-19 pandemic has huge impact on Canadian economy. Explain how the COVID-19 pandemic affect...
Recently the COVID-19 pandemic has huge impact on Canadian economy. Explain how the COVID-19 pandemic affect the Canadian economy in terms of GDP, inflation rate and unemployment rate. Compare the economic impact of current COVID-19 pandemic with the economic impact of global financial crisis, which happened during 2008-2009.
As a result of the global Covid-19 pandemic and lockdown, central banks around the world have...
As a result of the global Covid-19 pandemic and lockdown, central banks around the world have stepped in to provide massive liquidity to the capital markets. Among the key policies are to keep interest rates low or sub-zero (zero interest rate policy or ZIRP). Discuss the implication of such policies to credit risk management from the perspective of adverse selection and moral hazard.
As a result of the global Covid-19 pandemic and lockdown, central banks around the world have...
As a result of the global Covid-19 pandemic and lockdown, central banks around the world have stepped in to provide massive liquidity to the capital markets. Among the key policies are to keep interest rates low or sub-zero (zero interest rate policy or ZIRP). Discuss the implication of such policies to credit risk management from the perspective of adverse selection and moral hazard.                                            
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT