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(a) The banks attributed the weaker performance to, among others, lower net interest income, significantly higher allowance for impaired loans amid a Covid-19 pandemic-driven weaker
(a) The banks attributed the weaker performance to, among others, lower net interest income, significantly higher allowance for impaired loans amid a Covid-19 pandemic-driven weaker economic outlook and the automatic loan modification loss". Based on the above statement, discuss how government authorities encourage banks to maintain the flow of credit funds to the economy and mitigate financial risks to the banking system while preserving financial stability in coping with Covid-19 pandemic. (12 marks)
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