Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 46 , 01 December 2023
Open
Access | Article
Risk Assessment of the Banking Industry under COVID-19
* Author to whom correspondence should be addressed.
Abstract
The outbreak of the COVID-19 pandemic in 2020 has brought various risks and threats to the entire banking industry, from which we can also know the importance of bank risk management. This paper mainly describes, analyzes, and summarizes the five aspects of liquidity risk, credit risk, market risk, and systemic risk. With regard to liquidity risk, the article describes the impact of the Federal Reserve’s continuous interest rate hikes on the banking industry in order to curb the high inflation caused by the COVID-19 pandemic and takes the collapse of Silicon Valley Bank as an example for analysis. Regarding credit risk, this article takes Credit Suisse Bank as an example. Highly leveraged speculative transactions caused huge losses to the company due to the high default rate during the epidemic. For the analysis of market risk, the article synthesizes the deeds of Credit Suisse Bank and Silicon Valley Bank, focuses on the interest rate, and the reasons for the collapse of Credit Suisse and Silicon Valley Bank are different on the surface, but the underlying logic of the two events is traced to the same There is a close relationship between the current interest rate environment and the changes in interest rates in recent years. As for systemic risk, the article mainly writes about the purpose and effect of Basel III and the supervision of the capital adequacy ratio during the epidemic. Overall, commercial banks need to closely monitor these risks and take steps to mitigate them to ensure their stability and continued operations during the pandemic.
Keywords
liquidity risk, credit risk, market risk, systemic risk
References
1. Ahmad, T., Haroon, Baig, M., & Jin, H. (2020). Coronavirus Disease 2019 (COVID-19) Pandemic and Economic Impact. Pakistan Journal of Medical Sciences, 36, 73-78.
2. Belitski, M., Guenther, C., Kritikos, A. S., & Thurik, R. (2021). Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses. Small Business Economics, 58(2), 593–609.
3. Dunbar, K. (2022). Impact of the COVID-19 event on U.S. banks’ financial soundness. Research in International Business and Finance, 59, 101520.
4. Van Vo, L., & Le, H. T. T. (2023). From Hero to Zero - The Case of Silicon Valley Bank. Social Science Research Network.
5. Baker D. (2023). The Silicon Valley Bank Run: Regulatory and Media Failure. Intereconomics, 58(2), 127-128.
6. Zhang H. (2023). Credit Suisse, The Next Lehman Brothers? Social Science Research Network.
7. Hojnik, M. (2020). Mozambique Credit Suisse is liable for the $2 bn secret debt. CADTM. Retrieved from https://www.cadtm.org/Mozambique-Credit-Suisse-is-liable-for-the-2-bn-secret-debt.
8. Vőneki, Z. T. (2020). Crisis management and operational risk management in the financial sector in the shadow of COVID-19. Economy & Finance, 7(3), 309–325.
9. Ghouse, G., Bhatti, M. I., & Shahid, M. H. (2022). Impact of covid-19, political, and financial events on the performance of Commercial Banking Sector. Journal of Risk and Financial Management, 15(4), 186.
10. Elnahass M, Trinh V Q, Li T. (2021). Global banking stability in the shadow of Covid-19 outbreak. Journal of International Financial Markets, Institutions and Money, 72, 101322.
11. Sozaeva, F. K. (2021). Evaluation of the effectiveness of Basel III reforms under covid-19. Ekonomika I Upravlenie: Problemy, Resheniya, 2(5), 21–26.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-139-1
- ISBN (Online)
- 978-1-83558-140-7
- Published Date
- 01 December 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/46/20230321
- Copyright
- 01 December 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited