Some countries’ banking systems might have to be recapitalised or even restructured, if their economies are severely handicapped by prolonged disruption from the coronavirus outbreak, officials at the International Monetary Fund said on Tuesday.
Leading regulators and bank chief executives, particularly in the United States, have said lenders are robust enough to withstand the unfolding economic crisis.
Tobias Adrian, the director of the IMF’s monetary and capital markets department, told Reuters in an interview that in a ‘baseline’ scenario that would be a repeat of a 2009-type growth path, banks could withstand the adverse impact. Adrian cautioned, however, that conditions could deteriorate.
“(In a) beyond-severely adverse scenario, then it could be that some banks are undercapitalized and at that point policy makers might have to take further actions such as recapitalizing or restructuring banking systems,” Adrian said.