Economic aftermath of the coronavirus pandemic is likely to worsen when authorities start rolling back relief measures — and banks could experience more damage. Government stimulus in many countries is helping businesses tide through the current difficult period. But when those measures come to an end, many companies may not survive.
Politics and civil society would make it difficult for governments to continue supporting those businesses financially for long periods. Banks globally have also entered the current pandemic-induced crisis on stronger footing and can take a lot more pain compared to the global financial crisis more than a decade ago.
The fallout of the macroeconomic shock has still to filter through the financial system at this point in time.