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Central bank responses to COVID-19

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  • Patricia C. Mosser

    (Columbia University)

Abstract

Central bank responses to COVID-19 have been extraordinary in speed, in size and in scope. Much easier monetary policy, massive liquidity provision, and targeted credit support to the real economy all played a role in stabilizing financial conditions and credit. On net, there is preliminary evidence that central bank actions have been a positive—for access to credit and for the real economy—during very trying times. But the first six months have made clear that central bank policy can only indirectly address the core economic policy challenges of the crisis, whose trajectory remains highly uncertain. The risks to the economy and financial system remain very large, and key policy questions—on the degree of fiscal policy support to the real economy, about the limits of central bank risk taking and monetization of debt, and about the wisdom of heavy reliance on central bank policies given their impact on leverage and debt levels—remain just that.

Suggested Citation

  • Patricia C. Mosser, 2020. "Central bank responses to COVID-19," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 55(4), pages 191-201, October.
    • Handle: RePEc:pal:buseco:v:55:y:2020:i:4:d:10.1057_s11369-020-00189-x
    DOI: 10.1057/s11369-020-00189-x
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    References listed on IDEAS

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    Cited by:

    1. Rizvi, Syed Aun R. & Pathirage, Kasun, 2023. "COVID-19 policy actions and inflation targeting in South Asia," Journal of Asian Economics, Elsevier, vol. 84(C).
    2. CRISTE, Adina, 2022. "Central Banks Contributions In Managing The Pandemic Crisis. A Summary At The Eu Countries Level," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 26(3), pages 76-93, September.
    3. Simplice A. Asongu & Nathanael Ojong & Valentine B. Soumtang, 2021. "Central Banks’ responses to the Covid-19 pandemic: The case of the Bank of Central African States," Working Papers of the African Governance and Development Institute. 21/076, African Governance and Development Institute..
    4. Klejda Gabeshi, 2022. "Overview Of Credit Activities Of Banks In The Developed Economies," Management Strategies Journal, Constantin Brancoveanu University, vol. 55(1), pages 92-99.
    5. Dunbar, Kwamie, 2022. "Impact of the COVID-19 event on U.S. banks’ financial soundness," Research in International Business and Finance, Elsevier, vol. 59(C).
    6. Asongu, Simplice & Ojong, Nathanael & Soumtang, Valentine, 2021. "Central Banks’ responses to the Covid-19 pandemic: The case of the Bank of Central African States," MPRA Paper 111558, University Library of Munich, Germany.
    7. Hazar Altınbaş, 2022. "The influence of the pandemic on financial decisions made by individuals in Turkey: A cross-sectional study," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 49(3), pages 341-353, September.

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