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Financial Industry Reacts as Coronavirus Officially a Pandemic

 

Story updated 3:25 p.m. CDT

The CEO's of the nation's largest banks met with President Donald Trump Wednesday, discussing the next steps and a plan of action to combat growing concerns surrounding COVID-19, according to CNBC.

Bank of America CEO Brian Moynihan said the banks are in a "great position" with plenty of capital and liquidity. He added the banks are looking to help all Americans and offer relief to consumers, especially to those who have been forced to be out of work due to the disease.

Moynihan added that people are still spending money in today's economy.

Citigroup CEO Michael Corbat opened his remarks by saying, "this is not a financial crisis."

Corbat added banks want to provide liquidity and there is a great deal of fear with recent talks of recession. He also said that the markets are currently in its "discovery phase" as it works to understand how the market is reacting to COVID-19.

"We're here to help," Corbat said.

Trump announced that he plans to make an announcement later Wednesday night and something will need to be done "as soon as possible."

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In a joint statement from several federal financial and state regulators, financial institutions are being encouraged to meet the financial needs of customers and members affected by the coronavirus (COVID-19), which has now been classified by the World Health Organization (WHO) as a pandemic.

The agencies named in the statement include:

  • Board of Governors of the Federal Reserve System
  • Consumer Financial Protection Bureau
  • Federal Deposit Insurance Corporation
  • National Credit Union Administration
  • Office of the Comptroller of the Currency
  • Conference of State Bank Supervisors

According to Mark Zandi, Chief Economist at Moody’s Analytics, there’s a 60% chance of the U.S. economy going into a recession this year. Zandi told Bloomberg that the economic disruption would batter the housing market, despite record-low mortgage rates.

“Housing is being buffeted by two gale forces moving in opposite directions,” Zandi said. “The question is, what’s the end result of all that? In all likelihood, the recession will trump the lower rates.”

Stocks fell significantly on Monday, earning it the name "Black Monday" as the Dow plunged 1,800 points and the S&P decline by 7%, spurred by the spread of coronavirus as well as Saudia Arabia launching an oil price war with Russia.

The oil war was dwarfed by COVID-19, and the Federal Reserve already cuts rates a week prior.

"This will be remembered as Black Monday," said analyst Neil Wilson at trading site Markets.com on Yahoo Finance.

With this in mind, regulators note that many financial institutions may face staffing challenges.

In cases in which operational challenges persist, regulators announced that they will expedite, as appropriate, any request to provide more convenient availability of services in affected communities. The regulators also will work with affected financial institutions in scheduling examinations or inspections to minimize disruption and burden.

On ABC News, Department of Housing and Urban Development Secretary and White House coronavirus-task-force member Dr. Ben Carson urged people to remain calm, but be smart.

“It’s very important for people to remember that this virus is like other viruses. It should be treated the same way,” Carson told ABC News. “We have flu seasons that come up frequently, and there are certain precautions you take during that time.”

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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