As the human and economic costs of the COVID-19 pandemic have unfolded, the global financial system has been both a source of strength—with banks and fintechs helping distribute support to small businesses and households in need—and an area of potential risk, with record levels of market volatility and growing concern around credit losses. Governments, central banks, regulators, and international organisations have moved rapidly to address the economic collapse and financial fallout, but questions remain around how policy should continue to evolve to preserve financial stability.
The Forum’s Platform for Shaping the Future of Financial and Monetary Systems has convened several virtual roundtables since early March—with stakeholders from banks, asset managers, fintechs, insurers, investors, international organisations, and central banks—to discuss the impacts of COVID-19 on the global financial system. This briefing summarises the outcomes of these initial discussions, highlighting participants’ views on financial developments and on the highest priorities for policy-makers moving forward.
Summary of policy recommendations:
- “Flattening the curve” of firm mortality must be a top policy priority, and governments will have to expand the size and scope of support programmes over time.
- Governments, including regulators and central banks, must continue to coordinate policy on a global level to help maintain financial stability. Within countries, policy guidance must be clear and consistent across regulatory agencies.
- Policy-makers must ensure that the financial system remains capable of safely meeting the public’s need for financial services through digital channels.
- Advanced economies may need to further expand the support offered to emerging markets and developing economies.