With the government’s backing and thanks to the unprecedented capital levels they built up since the 2008 financial crisis, banks could provide relief in a way that they never have before.
The pandemic has upended staffing plans, sparked concerns about servicers’ capacity to handle the expected crush of missed payments, and even raised questions about their ability to stay afloat.
The Australian firm agreed to pay around $1 million in connection with allegations that it broke the law by operating without a license in the nation's largest state.
Bankers say they understand the need for an extraordinary government response to the coronavirus outbreak, but worry that even slashing interest rates won’t stimulate demand.
Banks typically don't offer loans to cash-strapped consumers, and are poorly positioned to start doing so on an emergency basis — unless the government steps in to help.
No-interest loans and overdraft forgiveness are among the lifelines banks are offering to consumers and small businesses whose livelihoods are being upended by the economic fallout.
The move come a day after the Bank of England cut rates and introduced a series of emergency measures, including capital requirements and a lending program for smaller companies.
Firms such as Afterpay that offer financing to shoppers have been enjoying rapid growth. But their model is under scrutiny from regulators, being mimicked by credit card lenders and faces heightened risks in a downturn.
Concerns about the economic fallout of coronavirus have mostly focused on supply chain disruptions. But fears are growing that weakening consumer demand could spark a recession.
