Randal Quarles, the Federal Reserve’s vice chairman for financial regulation, said that while global policy makers responded decisively to the coronavirus outbreak earlier this year, the financial system isn’t out of the woods yet, the Wall Street Journal reported. “The COVID event is not behind us yet,” Quarles said. “We know that the financial system will face more challenges.” Many households face “bleak” employment prospects, Quarles said, and the next phase of the pandemic will “inevitably involve an increase in nonperforming loans and provisions as demand falls and some borrowers fail.” The global economy is projected to contract sharply by 4.9 percent in 2020, a much worse outcome than during the 2007-08 crisis, he said, citing a recent International Monetary Fund forecast. “While some indicators suggest a rebound in activity, the path of recovery remains highly uncertain,” he said.
