REGULATORY POLICY OF CENTRAL BANKS REGARDING OVERCOMING THE CONSEQUENCES OF THE COVID-19 PANDEMIC AND FURTHER CRISIS

Abstract

The article is dedicated to topical issues of the research of the regulatory policy of the central banks of different countries in the process of overcoming the consequences of the pandemic of the COVID-19 pandemic and the global economic crisis caused by it. A comparison of the actions of state bodies during the global economic crisis of 2007-2009 and the crisis caused by the coronavirus pandemic was made. The analysis of the results of the influence of state bodies, in particular central banks, on the processes of overcoming crisis phenomena caused by the pandemic was carried out. The crisis caused by the COVID‑19 has affected the economies of many countries, simultaneously affecting aggregate demand, aggregate supply and financial conditions. Although it was recognized that fiscal regulatory measures were more appropriate to counter the COVID‑19 crisis, monetary policy played a key role in responding promptly to the unexpected and sharp reduction in economic activity and the freezing of markets. The regulatory policy of Ukrainian banks consisted of the following strategic directions: maintaining macro stability, restoring lending to the economy, developing the financial services market, developing the infrastructure of capital markets, etc. A distinctive feature of central banks' response to COVID-19 has been the use of measures aimed at supporting the flow of credit to households and non-financial corporations. Their deployment was more direct and far-reaching than during the financial crisis of 2007-2009. Conversely, if financial sector liquidity support was significant during the previous financial crisis, it played a more limited role during the Covid-19 pandemic. These differences partly reflect the different nature of the two crises. The global financial crisis first hit financial markets and then slowly spread to the real economy, affecting confidence and worsening credit conditions for businesses and households. In contrast, the COVID-19 pandemic has led to severe containment measures that first hit the real economy and then spread to the financial sector.