Sound Banks for Healthy Economies: Challenges for Policymakers in Latin America and the Caribbean in Times of Coronavirus

The COVID-19 crisis has exacted a high human and economic toll in Latin America and the Caribbean. Given deep recessions, financial systems are likely to come under considerable strain, and it is not yet certain how long the health crisis will last and how quickly and soon economies will recover. Unlike recent balance of payments or financial crises, this may be a slow-developing event in which credit risks are the main issue. Having good policies in place will be crucial to navigate the coming months and maintain financial stability. This report identifies and analyzes the challenges and develops key recommendations to help policymakers across the region make the necessary decisions to ensure that banks play a constructive role in the recovery.