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Found 1 result for Claudio Borio[Author]
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. 2020;55(4):181-190.
doi: 10.1057/s11369-020-00184-2. Epub 2020 Sep 24.

The Covid-19 economic crisis: dangerously unique

Claudio Borio  1
Affiliations
Free PMC article

The Covid-19 economic crisis: dangerously unique

Claudio Borio. Bus Econ. 2020.
Free PMC article

Abstract

The Covid-19 crisis is unique in several respects. This devastating recession does not have an economic origin, will dance largely to the tune of non-economic factors, and is truly global. The policy response has been equally unique, in terms of speed, size and scope, eliciting an unprecedented concerted effort combining monetary, fiscal and prudential policies. This has contained the fallout. At the time of writing, financial markets have rebounded to the point of looking exuberant, but it all feels more like a truce than a peace treaty. The crisis is transitioning from the liquidity to the solvency phase in a context of limited and shrinking room for policy manoeuvre. All this raises difficult near- and longer-term challenges. Rebuilding policy buffers in all policy areas is likely to be the policy challenge of the decade ahead.

Keywords: COVID-19; Debt; Illiquidity; Inflation; Insolvency; Macroeconomic policies.

Figures

Fig. 1
Fig. 1
A global sudden stop
Fig. 2
Fig. 2
Share of bank loans in firms’ financing has fallen1 (in percent)
Fig. 3
Fig. 3
Countries taking easing prudential measures (in per cent)
Fig. 4
Fig. 4
Banks entered the crisis in a strong position (in percent)
Fig. 5
Fig. 5
Prompt and forceful fiscal response (as a percentage of GDP)
Fig. 6
Fig. 6
Policies have stabilised markets
Fig. 7
Fig. 7
Credit expanded considerably more during this crisis than during the GFC (in percentage points)
Fig. 8
Fig. 8
Banks are under pressure and buffers are limited if the crisis persists
Fig. 9
Fig. 9
Soaring public debt (as a percentage of GDP)
Fig. 10
Fig. 10
Turmoil in US markets
Fig. 11
Fig. 11
Monetary and fiscal interactions will be prominent going forward (as a percentage of GDP)
Fig. 12
Fig. 12
Into a debt trap?
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References

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