Economic Resilience and Banking Responses during the COVID-19 Crisis

The COVID-19 pandemic posed an unprecedented shock to global finance, testing the capacity of banking systems to absorb losses, maintain liquidity and continue credit provision. Economic resilience in this context refers to the ability of banks and financial markets to withstand severe disruptions while supporting households and firms. Across regions, large and well-capitalised banks demonstrated greater resistance, leveraging robust capital buffers and diversified portfolios. Simultaneously, rapid digitalisation of channels and accelerated regulatory relief measures—such as reductions in capital requirements and moratoria on loan repayments—helped sustain lending flows. State interventions, ranging from loan guarantees to wage subsidies, alleviated funding shortages for small and medium-sized enterprises. The combined effect of pre-crisis preparation, flexible policy frameworks and technological adaptation underpinned a gradual recovery in banking performance and credit growth, with important lessons for future systemic shocks.

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Economic Resilience and Banking Responses during the COVID-19 Crisis publication trend

The graph below shows the total number of articles in economic resilience and banking responses during the covid-19 crisis across all publications each year (not limited to Nature Index journals).

Technical terms

Economic resilience: The capacity of financial institutions and markets to absorb shocks and continue critical functions without severe disruption.

Capital adequacy ratio: A measure of a bank’s capital relative to its risk-weighted assets, indicating its ability to absorb losses.

Liquidity coverage ratio: The proportion of high-quality liquid assets held by a bank to cover net cash outflows over a 30-day stress period.

Countercyclical capital buffer (CCyB): Additional capital that regulators can require banks to hold in good times, which can be released during downturns to support lending.

Non-performing loan (NPL): A loan on which the borrower is not making interest payments or repaying principal as scheduled.

References

1. Resistance of commercial banks to the crisis caused by the COVID-19 pandemic: the case of Poland. Equilibrium Quarterly Journal of Economics and Economic Policy (2020).
2. Digitization and Financial Performance of Banking Sectors Facing COVID-19 Challenges in Central and Eastern European Countries. Electronics (2022).
3. Coronavirus pandemic impact on bank performance. Frontiers in Psychology (2022).
4. Countercyclical capital buffers and credit supply: Evidence from the COVID-19 crisis. Journal of Banking & Finance (2023).