COVID-19 pandemic impact on banking sector: A cross-country analysis
Citation
Shabir, M., Jiang, P., Wang, W., & Işık, Ö. (2023). COVID-19 pandemic impact on banking sector: A cross-country analysis. Journal of Multinational Financial Management, 67, 100784.Abstract
This study examines the effects of the COVID-19 outbreak on the performance and stability of the
banking sector. Our sample consists of 2073 banks in 106 countries from 2016Q1 to 2021Q2. We
employ several alternative bank performance and stability measures for a comprehensive analysis
and robustness. The findings show that the COVID-19 outbreak has significantly reduced bank
performance and stability. These results are consistently observed across several geographical
regions and countries’ income classifications. Additional analysis shows that the adverse impact
of COVID-19 depends on the characteristics of the bank and market structure. While a better
regulatory environment, institutional quality, and financial development have significantly
increased the strength and resilience of banks. These findings provide practical implications for
regulators and policymakers in the face of unprecedented uncertainty caused by the COVID-19
pandemic.