Description

The webinar details the reactions of central banks to the current Covid-19 pandemic and contrasts these with their monetary policy operations during normal (non-crisis) times and their reactions to the Great Financial Crisis (GFC) of 2007–2009. It situates the response of central banks in Asia within a global context, examining and comparing the responses of central banks in the United States, the Euro area, the United Kingdom, Japan, Singapore and Hong Kong. It also explains why the Covid-19 crisis presents unprecedented challenges. Financial markets and economies are not the triggers of this calamity as they were in many previous crises when central banks had to react swiftly and forcefully. Instead, the financial sector has fallen victim to a pandemic that paralyzes society, trade, and business globally. Liquidity is a central bank’s conventional weapon, but it is an insufficient remedy in a lockdown that paralyzes businesses in unprecedented ways. Caught in a pandemic of dramatic magnitude, Asia, Europe, the United States and, evidently, the whole world, must brace against a potential escalation of the situation into a monetary and sovereign debt crisis if infection rates require further drastic lockdown measures.