Fiscal measures to support the real economy in 2020 have protected banks from most of the losses on their loans and it will be "crucial" to continue to ensure the effectiveness of this aid.
However, if on the one hand the European banking sector appears to be sufficiently capitalized to cope with the stress induced by the pandemic, on the other "the authorities must be ready for further measures if a very serious scenario should materialize".
The European Central Bank writes this in its 2020 annual report presented today to the European Parliament, in which it cites a Covid vulnerability analysis.
