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How to save our economy

An excerpt from the speech of Sławomir S. Sikora, CEO of Citi Handlowy, during the “Rebuilding the Economy of Poland and Other Countries in Times of Recession” debate (20 Banking Forum):

In an analysis of three crises, the Great Depression from the 1930s, the crisis of 2008 and the current one, Paul De Grauwe, an economist from LSE, demonstrated that the current, much quicker recovery results from, above all, the governments’ and central banks’ strong support for economies, combined with the measures taken by the banking sector.

While we did relatively well in the first stage of the crisis caused by the pandemic, in the next stage it is necessary to maintain a good cooperation between the governments and the financial sector. We should bear in mind, however, that there are a few reasons why the struggle is currently ever greater for the Polish banking sector. Though highly capitalized and technologically advanced, the sector is getting unprofitable,  not being able to cover cost of capital . The systemic risk has also increased, as a consequence of the losses recorded by banks in the first half of 2020. To date, the banking sector’s call for a tax relief for new corporate loans has not been realized, though it could stimulate financing to the economy. Alarmingly, the financing of the budget is growing much faster than that of enterprises. This might have negative long-term consequences, which is why this situation needs to be adjusted. This, in turn, calls for a change in policy framework for the financial sector.  
Both for Polish and international companies the pandemic and the way of dealing with it are of key importance when making investment decisions. Questions that are currently on everyone’s mind are about the probability of another lockdown and the issue of the availability of financing. All entrepreneurs are closely following the developments connected with and reactions to the pandemic, as these will determine the shape of the future. I am of the opinion that support for the healthcare services should be seen as support for the economy, as it will affect the economy just as much as the support for companies.
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