Executive Summary
The COVID-19 pandemic is the first major test of the global financial system since the
G20 reforms were put in place following the financial crisis of 2008. While significantly
different in nature from the 2008 crisis, this real-life test may hold important lessons for financial
policy, including the functioning of the G20 reforms. Any analysis at this stage needs to bear in
mind that the pandemic is not yet over and that its economic and financial impact has been
greatly mitigated by bold policy actions. The objective of this report, which has been prepared in
collaboration with standard-setting bodies (SSBs), is therefore to identify preliminary lessons for
financial stability from the COVID-19 experience and aspects related to the functioning of the
G20 financial regulatory reforms that may warrant further attention at the international level.
Thus far the global financial system has weathered the pandemic thanks to greater
resilience, supported by the G20 reforms, and the swift, determined and bold international
policy response. Effective implementation of those reforms meant that core parts of the system
entered the pandemic in a more resilient state than during the 2008 financial crisis. Large banks
hold more capital, have more liquidity and are less leveraged, which allowed them to cushion,
rather than amplify, the macroeconomic shock. Financial market infrastructures (FMIs),
particularly central counterparties (CCPs), functioned as intended. However, the pandemic
experience also highlighted differences in resilience within and across financial sectors. Key
funding markets experienced acute stress in March 2020, forcing authorities to take decisive and
unprecedented action to sustain the supply of financing to the real economy, provide economic
assistance, alleviate US dollar funding shortages, and support market functioning.