The Impact of Covid 19 Pandemic on Financial Stability

The Impact of Covid 19 Pandemic on Financial Stability
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The Impact of Covid 19 Pandemic on Financial Stability
Introduction
Covid-19 has sent economies throughout the globe into an unknown depth of recession due to disrupting international trade and commerce. To put it another way, this has placed a tremendous strain on the global capital markets, putting the global financial system at risk. The resulting worldwide financial crisis has been especially severe, with borrowing prices skyrocketing due to massive defaults. Commodity prices have precipitously, with massive foreign financial withdrawals accompanying lockdowns and travel restrictions that have paralyzed labor markets and economic activity. The multinational COVID-19 epidemic has had serious consequences on the global economy and financial stability. The pandemic's impacts have been far-reaching, causing much uncertainty and undermining many people's financial stability throughout the globe. This article will investigate the effect of the COVID 19 pandemic on the financial stability of individuals and companies globally.
Literature Review
The Covid-19 epidemic is mainly a public health and humanitarian concern, and it raises extraordinary health hazards and places enormous strain on global healthcare systems. This health catastrophe has erupted into an economic calamity, posing an enormously difficult trade-off between public health and wider socio-economic prosperity. This crisis has also disclosed several significant tail risks and highlighted various financial market vulnerabilities. Corporate credit risk, sovereign default risk, and a sudden realization of the flight-to-credit-quality phenomena are among the most significant. For the first time, a financial crisis has directly affected the economy rather than the other way around. Instead, it originated from a synchronized unexpected halt in the actual world economy, the aftermath of which has extended to financial markets, causing broad global financial disruption. Given the nature of the crisis, the course of the virus and behavioral reactions to it will determine the near-term economic and financial reaction.
Following the virus's spread outside China's borders, global finan...