The new crisis and the financial sector - do previous lessons help?

Abstract

The economic and financial crisis that started in the period 2007-2009 provoked substantial changes in the financial services landscape. The crisis started from the financial sector and caused other crises as debt and confidence crisis. However, after that crisis significant reforms were made in the EU in order to overcome its effects and to prepare the Union, its financial sector and economy for possible future crises.
The current crises after the COVID-19 outbreak is a different one. It started as a health crises and moves to an economic crisis with significant economic recession, higher unemployment, increase in social challenges in Europe and emerging of new ones. In these extremely difficult and unpredicted times with loss of businesses and jobs, the attention is to the financial sector that shall stimulate the economy and the follow-up recovery. However, is the financial stability also threatened? Is it possible the health and economic crisis to turn to a financial one again or the financial sector will be part of the solution of the problems and not part of the problem itself? Does the financial sector learned the lessons from the previous crises and is it possible those lessons to help this sector to perform its functions in the current situation? These are some of the questions that the current paper will discuss. It will end with some recommendations and conclusions.