Pandemics of the poor and banking stability

Lagoarde‐Segot, Thomas; Leoni, Patrick L.

doi:10.1016/j.jbankfin.2013.04.004

Cited by 63 publications

(37 citation statements)

References 36 publications

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“…The need for ramped up purchases of medicines and food and the precautionary motive are cited as the reason for this. This conclusion was reached, among others, by Leoni (2013), analysing depositor behaviour during the HIV epidemic in developing countries. Lagoarde-Segot and Leoni (2013) created a model indicating the increased risk of banking system failure in a developing country if a pandemic (AIDS or malaria) spreads there.…”

Section: Related Literaturementioning

confidence: 77%

Resistance of commercial banks to the crisis caused by the COVID-19 pandemic: the case of Poland

Korzeb

Niedziółka

2020

102

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Research background: The analysis allows to assess the impact of the industry structure of the credit portfolio on the resistance of commercial banks to the crisis resulting from the COVID-19 pandemic. It uses two independent methods to measure the impact of the pandemic on industry risk and the methodology allowing to prioritize industries in terms of potential negative effects of the crisis. Purpose of the article: The aim of the research is to assess the resilience of commercial banks operating in the Polish banking sector to the potential effects caused by the COVID-19 pandemic. The diagnostic features of 13 commercial banks were selected for its implementation. Methods: Two linear ordering methods were used, namely the Hellwig method and the TOPSIS method. The following were used as the criteria for parametric assessment of the resilience of commercial banks: capital adequacy, liquidity level, profitability of business activity, share in the portfolio of exposures with recognized impairment and the resilience of the bank's credit portfolio to the risk resulting from the exposure in economic sectors. These sectors were classified according to the level of risk associated with the effects of the crisis caused by the COVID-19 pandemic. Findings & Value added: The study allows to conclude that the largest banks conducting their operations in Poland are the most resistant ones to the consequences of the pandemic. At the same time, the banks most vulnerable due to the crisis were identified. The conclusions can be used, inter alia, in the process of managing the financial system stability risk and contribute to the discussion on the impact of the pandemic on the condition of commercial banks in emerging markets.

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Section: Related Literaturementioning

confidence: 77%

Resistance of commercial banks to the crisis caused by the COVID-19 pandemic: the case of Poland

Korzeb

Niedziółka

2020

102

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“…More than anything else, the unprecedented macroeconomic and health systems shocks are likely to have spillover effects on financial systems of every nation in a wide range of channels. As the pandemic pushes aggregate demand, production, trade and economic activities to slow down and unemployment to rise, financial institutions (FIs) in almost every country fear an increasing risk of fallout without government support (IMF 2020).…”

Section: Introductionmentioning

confidence: 99%

COVID-19 implications for banks: evidence from an emerging economy

Barua

2020

SN Bus Econ

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The COVID-19 pandemic is damaging economies across the world, including financial markets and institutions in all possible dimensions. For banks in particular, the pandemic generates multifaceted crises, mostly through increases in default rates. This is likely to be worse in developing economies with poor financial market architecture. This paper utilizes Bangladesh as a case study of an emerging economy and examines the possible impacts of the pandemic on the country's banking sector. Bangladesh's banking sector already has a high level of non-performing loans (NPLs) and the pandemic is likely to worsen the situation. Using a state-designed stress testing model, the paper estimates the impacts of the COVID-19 pandemic on three particular dimensions-firm value, capital adequacy, and interest incomeunder different NPL shock scenarios. Findings suggest that all banks are likely to see a fall in risk-weighted asset values, capital adequacy ratios, and interest income at the individual bank and sectoral levels. However, estimates show that larger banks are relatively more vulnerable. The decline in all three dimensions will increase disproportionately if NPL shocks become larger. Findings further show that a 10% NPL shock could force capital adequacy of all banks to go below the minimum BASEL-III requirement, while a shock of 13% or more could turn it to zero or negative at the sectoral level. Findings call for immediate and innovative policy measures to prevent a large-scale and contagious banking crisis in Bangladesh. The paper offers lessons for other developing and emerging economies similar to Bangladesh.

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“…His analysis suggests that to be able to effectively distribute economic resources optimally depends on the cost functions namely: the available technology for controlling the relevant parameters underlying the epidemic and the available financial resources. Lagoarde-Segot and Leoni [ 45 ] used a theoretical model to study the stability of the banking sector in the joint prevalence of Malaria and AIDS. Their studies suggest that the likelihood of collapse of the banking sector increases as the prevalence of pandemics increases.…”

Section: Introductionmentioning

confidence: 99%

The Impact of COVID-19 on the Insurance Industry

Babuna

Yang

Gyilbag

et al. 2020

IJERPH

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This study investigated the impact of COVID-19 on the insurance industry by studying the case of Ghana from March to June 2020. With a parallel comparison to previous pandemics such as SARS-CoV, H1N1 and MERS, we developed outlines for simulating the impact of the pandemic on the insurance industry. The study used qualitative and quantitative interviews to estimate the impact of the pandemic. Presently, the trend is an economic recession with decreasing profits but increasing claims. Due to the cancellation of travels, events and other economic losses, the Ghanaian insurance industry witnessed a loss currently estimated at GH Ȼ112 million. Our comparison and forecast predicts a normalization of economic indicators from January 2021. In the meantime, while the pandemic persists, insurers should adapt to working from remote locations, train and equip staff to work under social distancing regulations, enhance cybersecurity protocols and simplify claims/premium processing using e-payment channels. It will require the collaboration of the Ghana Ministry of Health, Banking Sector, Police Department, Customs Excise and Preventive Service, other relevant Ministries and the international community to bring the pandemic to a stop.

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Pandemics of the poor and banking stability

Cited by 63 publications

References 36 publications

Resistance of commercial banks to the crisis caused by the COVID-19 pandemic: the case of Poland

Resistance of commercial banks to the crisis caused by the COVID-19 pandemic: the case of Poland

COVID-19 implications for banks: evidence from an emerging economy

The Impact of COVID-19 on the Insurance Industry

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