Abstract
The COVID-19 pandemic was a challenge for all aspects of life. Besides others, this includes health and social life as well as the overall state of the economy. To contain the spread of the coronavirus, governments throughout the world imposed temporary closures (lockdowns). The banking industry was affected by these lockdowns in multiple ways. To mitigate the potential negative impact of the COVID-19 pandemic on banks, the national and international supervisory authorities passed comprehensive measures. The aim of this paper is to highlight the main regulatory facilitations for German banks by focusing on measures regarding capital buffers and the operating areas of banks. Besides this, an expert study was conducted to analyze how the measures are perceived by German banks and to develop recommendations for action. The results of the study show that the measures have mainly had a signaling effect on banks. However, measures like the easing of capital requirements are also related to higher risks for the banks. The results illustrate that most banks have hesitated in taking these additional risks if they can avoid them, with other measures like general moratoria on payments considered helpful. Overall, the results demonstrated that the experts prefer a cautious approach to using the easing measures.
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