CreditExtension Manyofyourshort-termactionsshouldbefocusedonmanagingexistingcredit.But in thecomingmonthstherewillalsobeaspikeindemandfornewcreditfacilitiesto bridgewhateveryonehopeswillbeaV-shapedeconomicdownturn. Again, a data-driven approach to new credit extension will be critical. As income driesupandchecking-accountbalancesstarttodwindle,bankswillneedtosupport customers with smart lending options and working-capital support. It should go withoutsayingthatsimplyallowingcustomerstogointooverdraft,triggeringfeeson topofnewborrowing,shouldnotbethedefault.Infact,manybanksareintroducing blanketfeeprohibitionstopreventthathappening. Adata-drivenapproachtonewcreditshouldproactivelyaskquestionslike: • Canhomeequitybetappedviaacreditline? • Cancustomersborrowagainstretirementincomepotsorotherinvestments withoutliquidatingthematdepressedmarketvalues? • CanyouprovideadvancesagainsttermsavingsproductslikeCDs,orprovide accesstothosefundswithoutpenalties? • Aretherecommercialassetslikeequipmentorvehiclesthatcanbeappropriate security for newborrowing? • Morebroadly,arethereotherwaystosmoothcashflowbytakingaholisticviewof thebalancesheetsofyourindividualandcommercialcustomers? IntheUSthereareapproximately13,000pawnshops–it’stothemthatmanystrapped consumerswillbeturningforshort-termcash.Whilethebankingindustryisn’ttypically in the business of lending against jewelry and watches, it should nevertheless be creativeaboutitslendingcriteriaandtheassetsthatcanbepledged. 12 COVID-19: Open letter to retail and commercial banking CEOs