The coronavirus pandemic is likely to put more pressure on eurozone banks’ balance sheets unless there is a strong fiscal policy response, European Central Bank board member Isabel Schnabel warns.

“It cannot be taken for granted that negative effects on bank profitability from depressed profit margins can be compensated by lower loan-loss provisions also in the future,” Schnabel said in a speech today (August 26).

She referred to research suggesting that pandemics are usually followed by a