COVID-19 has acted as an accelerator, bringing into play scenarios which were previously only contingencies and making contingencies of (and requiring planning for) situations which were previously barely imaginable. The debt build-up from the corporate sector, in many cases kept going through governmental life-support, means that non-performing loans are likely to explode. Numerous companies are at levels of debt that mean they cannot realistically take on much more. Preferred equity investments are possible but provide less protection for the banks.

In this publication we focus on all facets of systemic risk that financial institutions face, and address many of the most important legal and management issues banks should now be considering as they seek to navigate the new reality and work to serve the interests of their many constituents, ranging from clients to shareholders and regulators.