The banking sector has managed to support the economy through continued lending, including to the sectors most affected by the lockdown measures. Compared to past crisis episodes, there are two main reasons why banks have played a different role in this crisis.
First, in terms of capital and liquidity, the euro area banking sector was much better prepared than it was before the great financial crisis. This was not least due to the progress made over the past decade in strengthening the regulatory standards for banks and moving towards the banking union.