These measures have been successful in helping the economy to absorb the shock of the coronavirus pandemic and have helped mitigate risks to financial stability. Corporate insolvencies have been limited and the rise in unemployment contained. Sovereign debt markets have remained stable, and these policy actions have prevented adverse feedback loops between the real economy and the financial system.
In stark contrast to the global financial crisis (GFC), banks have helped cushion the economic impact of the pandemic rather than exacerbate it. Bank capital and liquidity positions were much stronger at the onset of the pandemic than they were in 2008, bolstered by the post-GFC regulatory reforms.