Covid-19’s Impact on Financial Stability

Andrii Kaminskyi (), Mariia Balytska (), Ondřej Pavelek () and Ihor Honchar ()
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Andrii Kaminskyi: Taras Shevchenko National University of Kyiv, Department of Economic Cybernetics
Mariia Balytska: Taras Shevchenko National University of Kyiv, Department of Insurance, Banking and Risk Management
Ondřej Pavelek: Mendel University in Brno, Department of Law and Social Sciences
Ihor Honchar: Taras Shevchenko National University of Kyiv, Department of Statistics, Information and Analytical Systems and Demography

Chapter 7 in Financial Stability and Financial Shocks, 2026, pp 169-201 from Springer

Abstract: Abstract The COVID-19 pandemic became the most disruptive global shock to financial stability. Unlike traditional financial crises driven by credit or asset bubbles, the pandemic originated outside the financial system but rapidly spread through macroeconomic channels, supply chain disruptions, and behavioral responses. Governments and central banks responded with historically large policy interventions and coordinated international actions. These measures helped to stabilize markets, prevent a systemic collapse, and support credit flows to households and firms. However, they also generated side effects, including increased moral hazard, asset price inflation, and higher public and private debt burdens. At the same time, the crisis accelerated the rise of environmental, social, and governance (ESG) investing, as firms with stronger ESG performance proved more resilient, attracted additional investor capital, and often outperformed their peers across many markets.

Keywords: COVID-19 pandemic; Nonfinancial shocks; Financial stability; Policy interventions; Market risk measurement; ESG scores (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1007/978-3-032-14636-6_7

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