THE IMPACT OF THE COVID-19 PANDEMIC ON THE GOVERNMENT INTERVENTIONS ACROSS THE FINANCIAL SYSTEM. A WORLDWIDE SAMPLE
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By: IOANA GEORGIANA FĂRCAȘ
JEL: G2, G01
Keywords: fiscal measures, COVID-19 pandemic, government interventions
The COVID-19 pandemic had a significant impact on all sectors, especially on the financial sector. The creditworthiness of households and companies decreased significantly, and many investors were more reluctant to invest their savings. The aim of this study is to examine whether the COVID-19 pandemic can influence the volume of government interventions within the financial sector. We employ quarterly data from 2020, having a worldwide sample of 49 countries located in six continents. The main findings show that the pandemic negatively influences the volume of financial assistance offered to weak financial institutions. Further, the most affected countries by the pandemic are less likely to introduce rescuing measures for the troubled financial institutions due to higher expenses provided to the healthcare system. These results remain robust for different subsamples, such as high-income vs low-income economies.
DOI: https://doi.org/10.47743/rebs-2023-2-0001
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