The Response of International Financial Institutions to the COVID-19 Crisis

Abstract

Abstract The COVID-19 pandemic could be characterised as one of the most impactful crises so far in the 21st century, because of its multiple and multidimensional ramifications. The sudden shutdown of the global economy created the conditions for a new global crisis, just a few years after the global financial crisis. Furthermore, it overlapped with the ongoing challenges of dealing with the consequences of climate change and the digitisation of economies, as well as the existing geopolitical rivalries and geoeconomic inequalities. In this context, the International Financial Institutions (IFIs) were called on to play a dual key role: to act both as stabilisers of the global economic system and as promoters of international cooperation. The aim of this paper is to capture the IFIs’ response to the responsibility of managing and dealing with the economic effects of the pandemic crisis. ΙFIs, such as the International Monetary Fund and the World Bank, demonstrated flexibility and adaptability in providing financial support to address the crisis, showing that the international community was not inactive at this critical juncture. In addition, this study examines whether the responses of the IFIs opened a window of opportunity to re-strengthen the model of multilateralism at the international level.