ABSTRACT

Releasing Bank Buffers to Cushion the Crisis - A Quantitative Assessment   [open pdf - 0B]

From the Key Takeaways: "[1] Banks globally entered the Covid-19 [coronavirus disease 2019] crisis with roughly US$ 5 trillion of capital above their Pillar 1 regulatory requirements. [2] The amount of additional lending will depend on how hard banks' capital is hit by the crisis, on their willingness to use the buffers and on other policy support. [3] In an adverse stress scenario such as the savings and loan crisis, banks' usable buffers would decline to US$ 800 billion, which could support US$ 5 trillion of additional loans (6% of total loans outstanding). Yet in a severely adverse scenario, similar to the Great Financial Crisis, the corresponding figures would be only US$ 270 billion and US$ 1 trillion (1.3% of total loans)."

Report Number:
BIS Bulletin No. 11; Bank for International Settlements Bulletin No. 11
Author:
Publisher:
Date:
2020-05-05
Series:
Copyright:
2020 Bank for International Settlements
Retrieved From:
Bank for International Settlements: https://www.bis.org/
Media Type:
application/pdf
URL:
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