COVID-19 Impact on Financial Services
The pandemic has pushed the global economy into a recession and causing a halt to economic growth. According to the IMF, it is the ‘worst downturn since the great depression’.
Amid the COVID-19 pandemic, several countries across the world resorted to lock-downs to “flatten the curve” of the infection. These lock-downs have compelled ceasing almost all economic activity which is significantly affecting the businesses across the globe.
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The COVID-19 impact on financial services is taking a toll on the economies; and with the ongoing liquidity concerns and lock-down situations it seems, there’s more trouble brewing for financial institutions.
Record levels of market volatility and growing concern around credit losses. Governments, central banks, regulators, and international organizations rapidly addressing the economic collapse and financial fallout with adequate stance, but questions remain around how policy should continue to evolve to preserve financial stability.
NBFCs of India are facing a liquidity squeeze and strict regulatory actions shutting down many NBFCs out there. Funding of existing and new fintech firms can see a downtrend as investors may shy away from infusing fresh capital given the market conditions amidst corona scare.
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Impact on Financial Services:
- Increased Market Volatility: Stock markets around the globe experiencing increased volatility.
- Shaken Consumer Confidence.
- Deleveraging Continuing – Many banks and financial companies are still reeling from the fallout of the financial crisis, and will continue to do so in the short to medium term.
Author : Deepika Shenolikar
About the Author: Deepika is professionally qualified as CFA Chartered. She is currently pursuing GARP FRM Certification and associated with NSDL Payments Bank as an Assistant Manager in the Risk Management domain.