**4. Conclusion**

Last time around, in the course of the GFC, world leaders moved together to provide a common, coordinated response to the crisis; it was probably not perfect, but eventually it worked. Today, global leaders are facing a similar, if not greater and more complex, challenge, and their 'measures' will be assessed by their ability to deal with this global threat. Obviously, priority should be given to the public health aspects of the virus and in containing as much as possible the pandemic.

Regarding the financial system, it is quite possible that COVID-19 could have important repercussions for banks and other financial institutions. On a positive note, these repercussions do not seem likely to be imminent, as banks are stronger this time around. This means that adequate preparation by the regulatory authorities is possible, without of course any room for complacency, as markets can react quickly, unpredictably and in a contagious manner. Within this context, according to Beck [5], regulatory authorities should focus on (and prepare for) the following: (1) possible operational disruptions in the financial system, (2) strengthening confidence in financial markets by clearly signalling that they stand ready to intervene (they have shown this intention to a great extent so far), and (3) preparing for possible interventions in and resolution of failing banks.

Beyond any doubt, the aforementioned and in particular the role of central banks will be very crucial to maintain stability in global financial markets and make sure that credit flows to the real economy. But we need to remember that this crisis is not only about liquidity, it is also about solvency; after all, large segments of the economies of many countries have come to a standstill. As such, fiscal policy also has a vital role to play, where along with monetary and other policies; they should provide a 'cushion' against the impact of the pandemic, paving the way for an economic recovery later on.

To conclude then, there are currently several questions of economic nature that are seeking answers, for example, how far will the economic damage go? How bad will things eventually get? What will be the extent of economic contagion? And, importantly, what can policy-makers do to alleviate it? And will it work? Unfortunately, we do not have answers to these questions, only time accompanied by good research will provide them. For sure, however, the crisis caused by COVID-19 will rightfully take its own place in the long list of economic and financial crisis, some of which are discussed in this book, and is likely to make interesting reading for future market analysts and policy-makers.

## **Author details**

Stelios N. Markoulis Cyprus International Institute of Management, University of Cyprus, Open University of Cyprus, Cyprus

\*Address all correspondence to: smarkoulis@cytanet.com.cy

© 2020 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

**9**

*Introductory Chapter: Financial Crises DOI: http://dx.doi.org/10.5772/intechopen.93415*

[1] Baldwin R, Tomiura E. Thinking ahead about the trade impact of COVID-19, chapter 5. In: Baldwin R, Beatrice Weder di Mauro BW, editors. Economics in the Time of COVID-19. A VoxEU.org

[2] IMF. Global Financial Stability Overview. Washington DC; 2020

[3] Mann CL. Real and financial lenses to assess the economic consequences of COVID-19, chapter 5. In: Baldwin R, Beatrice Weder di Mauro BW, editors. Economics in the Time of COVID-19. A VoxEU.org Book; CERP Press; 2020

[4] Reinhart C, Rogoff K. This Time Is Different: Eight Centuries of Financial Folly. Princeton University Press; 2009

[5] Thorsten Beck T. Finance in the times of Corona virus, chapter 6. In: Baldwin R, Beatrice Weder di Mauro BW, editors. Economics in the Time of COVID-19. A VoxEU.org Book.

[6] Cecchetti SG, Schoenholtz KL. Bank Runs and Panics: A Primer. Available from: www.moneyandbanking.com.

[7] Cochrane. Corona virus monetary policy, chapter 12. In: Baldwin R, Beatrice Weder di Mauro BW, editors. Economics in the Time of COVID-19. A VoxEU.org Book. CERP Press; 2020

CERP Press; 2020

2020

Book. CERP Press; 2020

**References**

*Introductory Chapter: Financial Crises DOI: http://dx.doi.org/10.5772/intechopen.93415*
