| Abstract [eng] |
The objective of this study was to determine financial stability challenges during coronavirus pandemic. The work consists of three main parts: scientific literature analysis review, the research and its results, conclusions, and recommendations. Literature analysis reviews the concept of financial stability, its risks, improvement methods and different measure techniques. The literature also provides insights on economic challenges during coronavirus pandemic, especially increased financial burden of companies and households along with the rise of credit, liquidity risks for the financial institutions. After the literature analysis the author has carried out the research investigating the challenges of the financial stability of Lithuania before and during coronavirus pandemic. The challenges (increased credit, liquidity, market risks) were identified using financial stability index which was constructed with different 11 indicators which reflect the state of financial system. The performed research revealed that coronavirus pandemic has negatively affected the economic indicators due to quarantine effect on financial market, financial institutions, and infrastructure. The results of the research showed that new coronavirus cases had negative effect on financial stability of Lithuania while new vaccines per 100 people and bank ROA (%) had positive. Due to the strong monetary and fiscal response financial stability was strengthened after first months of the pandemics and has continued to develop during later analysis periods. The conclusions consist of the theoretical concepts of financial stability and the results of the research. Equally, the study recommends extending the research using risk warning indicators and stress testing methods which will assist for developing long term financial stability strategy. The study also showed that from all financial system, banking sector was the most affected by coronavirus, therefore its recommended for banks to strengthen their profitability control measures. |
