The role of finance – beyond bailouts
financial sector has performed much better during the past three years than many expected; among the reasons for that, two stand out, in my opinion: one, the post-2008 regulatory reforms that have strengthened the resilience of banks; two, the support programmes
introduced by governments across Europe in spring 2020 that affected the financial system indirectly. And as reassuring as it might be that the financial sector is not at the core of either Covid nor Ukraine/energy crisis, it is important to stress that it
still has a critical role to play in helping the resilience of the real economy. And even though many of the support packages are on the national level, it is important – again – to maintain the Single Market in banking, which allows for proper
risk sharing and allocation efficiency. It is also important to stress that banks and other financial institutions and markets will have an important role in the reallocation process, away from energy-intensive sectors, but also towards more resilient
supply chains. A strong and efficient financial sector is thus critical for both minimising the effect of a coming recession as for a robust recovery.