The spreading coronavirus infection is taking a toll on the global economy and traditional financial institutions are already hurting. The world’s largest banks have seen their stocks losing value over the past weeks and months while facing cash withdrawal pressure and preparing to deal with a shrinking asset base.
Also read: US Cash Crisis: Withdrawal Limits Spark Bank Run Fear
China’s ‘Big Four’ See Their Stocks Tumble
No one has a clear idea where this is going or what comes next for the planet’s financial system. What’s obvious, however, is that some of its elements are already under stress. Reports of banks imposing withdrawal limits in parts of the U.S. indicate a cash crisis is brewing. New interest rate cuts, more money printing and the flight of capital towards assets they don’t manage, such as cryptocurrencies, are going to limit the value banks have under their control.
China, where the covid-19 outbreak started, is home to the world’s largest banking sector in terms of assets. In mid-2019, the official figure stood at…