Pandemic demonstrates necessity of risk buffers

The poor outlook for the economy is weighing on banks, households and firms. Banks have accumulated buffers for a rainy day that should be deployed now as the coronavirus buffets the economy.

Regulatory reform has made banks more resilient than they were during the previous crisis. A robust lending capacity is now needed to help Finnish firms through the coronavirus crisis.

The coronavirus pandemic has the potential to aggravate long-standing vulnerabilities in the Nordic housing market. Housing market disturbances can increase credit risk for banks and interfere with their access to funding.

China has had huge difficulties to come even close to fulfilling its import commitments, which were consider to be hard to meet even before the coronavirus crisis.

Russia imposed strict lockdown measures similar to many countries, resulting in sharp reductions in demand and production.