ANALYSIS OF BANKING SECTOR PERFORMANCE DURING THE COVID-19 PANDEMIC: KEY LESSONS

Abstract

Only a few years after the global economic crisis, the world economy, which has not yet fully recovered from its effects, has faced a new crisis that significantly impacted the banking sector. Unlike the global financial crisis of 2008-2014, which arose from years of structural problems in the financial system, the crisis triggered by the COVID-19 pandemic is of a different nature. It was not caused by economic factors, and during this crisis, the banking sector acted as part of the solution rather than as a generator of the crisis, facilitating the operations of economic entities. Through measures implemented by governments and central banks, the banking sector became one of the key levers in mitigating the pandemic’s effects, reducing corporate illiquidity and alleviating the consequences of unemployment. During this period, the banking sector faced an increasing rise in nonperforming and problematic loans, while illiquidity in the real sector led to more restrictive credit poli-cies. In this context, the paper analyses the banking sector before, during, and after the COVID-19 pandemic, with the aim of identifying essential lessons that could serve as a foundation for addressing future crises.