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Covid-19: United efforts to overcome the crisis are indispensable

Covid-19: United efforts to overcome the crisis are indispensable
Coronacrisis update

​​​​​​​Banks face their biggest challenge in many years due to Covid-19. Major financial reforms taken in the past years have made banks safer, more stable, and more resilient in the face of shocks. 

But a health pandemic was not on the cards and banks need to work together with authorities to avoid any collapse in the economic system.

>> Learn more about Covid-19 and ESBG

>> Case study: German savings banks, customers stay connected

>> See related story: Europe stays resilient

BRUSSELS, 25 March 2020 – Savings and retail banking association ESBG today released a statement to policymakers in Europe outlining further ways to address financial sector issues brought on by the Covid-19 pandemic. 

In a letter signed by ESBG President Helmut Schleweis and association Managing Director Chris De Noose, ESBG says that despite the biggest challenge in many years, financial reforms taken after the financial crisis have made “banks safer, more stable, and more resilient in the face of shocks." The coronavirus outbreak was “not in the cards", however, and need exists “to work together with authorities to avoid any collapse in the economic system."

Fully committed to supporting their customers as they struggle through the Covid-19 pandemic, savings and retail banks in Europe commit themselves to finding the best, sustainable solutions. Locally rooted, savings and retail banks hold a crucial stabilising function in times of crisis due to their branch, online and mobile reach, being close to customers and lending activity in good times and not so good.

They help people – individuals, families, small and medium-sized companies (SMEs), institutions, young people, the elderly and society in general, in urban and also rural areas. Representing nearly 900 banks in 21 countries, ESBG noted in the letter that its members help SMEs and other companies “overcome liquidity bottlenecks and provide stability." For this to succeed, the Brussels-based association notes that “everything possible should be done in regulatory and macroprudential terms to maintain the liquidity and credit supply."

ESBG pinpointed in the letter some “real economy" concerns. SMEs face extraordinarily challenging times, an need to be helped through high-impact support measures offered in many countries to help them. That support should be targeted as well as to larger, heavily affected industries, such as transport and tourism. As all stakeholders from the public and private sectors work together to overcome this difficult period, economic, financial, fiscal and social measures need to be designed and implemented as soon as possible. Calls for greater European cooperation should not go unheeded, noting: “Europe needs to face the coronavirus crisis in a united and well-coordinated manner."

Banks during this crisis form an essential part of the solution. That's because ESBG members' value an inclusive and socially-committed approach to banking vital to during challenging times. People served by savings and retail banks can continue to rely on them as partners that do their utmost to mitigate many of the day-to-day, real-world effects the crisis brings. ESBG adds: “Now more than ever, we will stand strong to provide confidence, comfort and trust when customers and communities need it most."

​Welcoming efforts made made by authorities in Europe so far, ESBG attached with the letter an annex that includes specific policy areas ESBG sees needed to further address the Covid-19 economic and financial sector hit. Designed to give banks enough flexibility to continue supporting their customers, ESBG points out that “some measures already taken need additional guidance and an extended scope to achieve its objective." Proposals directed to institutions such as the European Central Bank and European Banking Authority, national and resolution authorities.

Communication - institutional & commercial