Taking Stock of the Financial Sector Policy Response to COVID-19 around the World
This paper introduces a new global database and a policy classification framework that records the financial sector policy response to the COVID-19 pandemic across 154 jurisdictions. It documents that authorities around the world have taken a diver...
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/143061607958551050/Taking-Stock-of-the-Financial-Sector-Policy-Response-to-COVID-19-around-the-World http://hdl.handle.net/10986/34941 |
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okr-10986-349412022-09-20T00:10:02Z Taking Stock of the Financial Sector Policy Response to COVID-19 around the World Feyen, Erik Alonso Gispert, Tatiana Kliatskova, Tatsiana Mare, Davide S. FINANCIAL REGULATION FINANCIAL STABILITY CORONAVIRUS COVID-19 GOVERNMENT POLICY PANDEMIC RESPONSE This paper introduces a new global database and a policy classification framework that records the financial sector policy response to the COVID-19 pandemic across 154 jurisdictions. It documents that authorities around the world have taken a diverse array of measures to mitigate financial distress in markets and for borrowers, and to support the provision of critical financial services to the real economy. Measures that focus on the banking sector constitute the majority of policies taken and aim to take advantage of the flexibility embedded in the international standards. However, emerging markets and developing economies tend to rely more on prudential measures that go beyond this embedded flexibility compared with advanced economies, which may reduce bank balance sheet transparency and increase risks. Using Cox proportional hazards and Poisson regressions, the paper takes initial steps to analyze the determinants of policy makers’ responsiveness and activity in emerging markets and developing economies, respectively. The results indicate that policy makers have typically been significantly more responsive and have taken more policy measures in emerging markets and developing economies that are richer and more populous. Countries with higher private debt levels tend to respond earlier with banking sector and liquidity and funding measures. The spread of COVID-19, macro-financial fundamentals, and fiscal and containment policies appear to play a limited role. In a substantially smaller sample, the paper explores the role of banking characteristics and finds that emerging markets and developing economies with higher private credit levels and that have adopted Basel III features have taken fewer policy measures. Future work is necessary for better understanding the country determinants of the policy response as well as the effectiveness and potential unintended consequences of the measures. 2020-12-17T15:20:49Z 2020-12-17T15:20:49Z 2020-12 Working Paper http://documents.worldbank.org/curated/en/143061607958551050/Taking-Stock-of-the-Financial-Sector-Policy-Response-to-COVID-19-around-the-World http://hdl.handle.net/10986/34941 English Policy Research Working Paper;No. 9497 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
FINANCIAL REGULATION FINANCIAL STABILITY CORONAVIRUS COVID-19 GOVERNMENT POLICY PANDEMIC RESPONSE |
| spellingShingle |
FINANCIAL REGULATION FINANCIAL STABILITY CORONAVIRUS COVID-19 GOVERNMENT POLICY PANDEMIC RESPONSE Feyen, Erik Alonso Gispert, Tatiana Kliatskova, Tatsiana Mare, Davide S. Taking Stock of the Financial Sector Policy Response to COVID-19 around the World |
| relation |
Policy Research Working Paper;No. 9497 |
| description |
This paper introduces a new global
database and a policy classification framework that records
the financial sector policy response to the COVID-19
pandemic across 154 jurisdictions. It documents that
authorities around the world have taken a diverse array of
measures to mitigate financial distress in markets and for
borrowers, and to support the provision of critical
financial services to the real economy. Measures that focus
on the banking sector constitute the majority of policies
taken and aim to take advantage of the flexibility embedded
in the international standards. However, emerging markets
and developing economies tend to rely more on prudential
measures that go beyond this embedded flexibility compared
with advanced economies, which may reduce bank balance sheet
transparency and increase risks. Using Cox proportional
hazards and Poisson regressions, the paper takes initial
steps to analyze the determinants of policy makers’
responsiveness and activity in emerging markets and
developing economies, respectively. The results indicate
that policy makers have typically been significantly more
responsive and have taken more policy measures in emerging
markets and developing economies that are richer and more
populous. Countries with higher private debt levels tend to
respond earlier with banking sector and liquidity and
funding measures. The spread of COVID-19, macro-financial
fundamentals, and fiscal and containment policies appear to
play a limited role. In a substantially smaller sample, the
paper explores the role of banking characteristics and finds
that emerging markets and developing economies with higher
private credit levels and that have adopted Basel III
features have taken fewer policy measures. Future work is
necessary for better understanding the country determinants
of the policy response as well as the effectiveness and
potential unintended consequences of the measures. |
| format |
Working Paper |
| author |
Feyen, Erik Alonso Gispert, Tatiana Kliatskova, Tatsiana Mare, Davide S. |
| author_facet |
Feyen, Erik Alonso Gispert, Tatiana Kliatskova, Tatsiana Mare, Davide S. |
| author_sort |
Feyen, Erik |
| title |
Taking Stock of the Financial Sector Policy Response to COVID-19 around the World |
| title_short |
Taking Stock of the Financial Sector Policy Response to COVID-19 around the World |
| title_full |
Taking Stock of the Financial Sector Policy Response to COVID-19 around the World |
| title_fullStr |
Taking Stock of the Financial Sector Policy Response to COVID-19 around the World |
| title_full_unstemmed |
Taking Stock of the Financial Sector Policy Response to COVID-19 around the World |
| title_sort |
taking stock of the financial sector policy response to covid-19 around the world |
| publisher |
World Bank, Washington, DC |
| publishDate |
2020 |
| url |
http://documents.worldbank.org/curated/en/143061607958551050/Taking-Stock-of-the-Financial-Sector-Policy-Response-to-COVID-19-around-the-World http://hdl.handle.net/10986/34941 |
| _version_ |
1764481979279998976 |