- A new IMF study assesses the impact of the pandemic on European banks' capital through its effect on profitability, asset quality, and risk exposures.
- Supportive policies are extremely important in reducing both the extent and variability of banks' capital erosion.
- For many larger banks, hybrid capital - which contains elements of both debt and equity - is likely to be an important source of funds at a time when the cost of capital remains high.
- A protracted recovery could result in much larger credit losses and higher provisions for bad loans.
For further details see:
How European Banks Can Support The Recovery