RESUMEN
Additional "capital buffers", such as the countercyclical capital buffer, were introduced after the 2008/09 crisis. These buffers were requested in addition to banks' minimum capital requirements. They should be built up during good times and can be used during bad times. While buffer requirements were reduced quickly in the spring of 2020, financial institutions have been reluctant to use the additional leeway as they may fear market stigma effects if capital ratios fall and they might abstain from new loans due to high uncertainty. The article argues in favor of a more simple and transparent organisation of macroprudential regulation as measures to raise the effectiveness of capital buffers, especially during a downturn.
RESUMEN
We present evidence from a repeated survey on risky asset holdings carried out on a representative sample of the German population six times between April and June 2020. Given the size of the Covid-19 shock, we find little evidence of portfolio rebalancing in April 2020. In May, however, individual investors started buying heavily, parallel to market recovery. The cross-section shows large differences as young, educated, high income, and risk tolerant investors are net buyers throughout and, thus, benefit from the stock market recovery. Older individuals, parents of young children, and individuals affected by adverse liquidity shocks from Covid-19 are net sellers. Given the high risk of illness, older people are hit by dual blows to both health and finances.