Financial Stability Review 2020 I

The COVID-19 pandemic is an exceptional shock triggering the materialisation of long-identified risks to financial stability and a collapse in global economic activity. The risks posed to domestic financial stability stem from the sudden halt in domestic activity, financial market developments, including the sharp repricing of risk premia, and structural vulnerabilities of a small open economy exposed to the downside risks in the recovery of global demand.

While the starting resilience of households and firms is significantly stronger compared to the onset of the financial crisis a decade ago, the scale of the economic shock is unprecedented and will create pressure on the financial position of borrowers and lenders. The transmission of these risks to the real economy and financial system will take time and in response, policymakers have reacted with a range of fiscal, monetary, macro-prudential and micro-prudential actions to mitigate amplification and enable the financial system to support households and businesses through this crisis.

Financial Stability Review 2020: I | pdf 1552 KB