EDITOR NOTE: Remember the Bank Failure Survival Guide we published over a year ago? Well, it’s for times like these. When we first published it, we were concerned with certain fragilities inherent to most banks. Now those fragilities have been elevated to “pre-existing conditions,” amid COVID-19’s economic threat. The IMF announced that the banking sector will come under stress in the coming months. This, however, is not a (stress) test. It’s the real thing. And you might want to ask yourself whether you’re truly prepared for what might happen should the worst of scenarios materialize.
The banking sector is likely to come under further stress in the coming months and could suffer capital shortfalls, the International Monetary Fund warns.
“The resilience of the banking sector is likely to be tested,” the IMF’s chief financial counselor, Tobias Adrian, said at the launch of the Global Financial Stability Report today (October 13).
The IMF says banks broadly entered the crisis with strong capital and liquidity positions. But in a stress test of the global banking system, it
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