Thechallengeformanybankswillbehowtooperationalizetheseprograms.Manycore banking and loan accounting systems are just not set up forthis type of operational flexibility atscale. These programs will be particularly challenging if mandated payment holidays are not universally implemented, but instead are targeted at specific segments of the population. Banks that aren’t Manybankshavesomeexperienceofthesetypesofloanmodificationprogramsfromthe aftermath of the 2008 financial crisis (particularly for mortgages). But this time the loan structured to offer programsrequiringmodificationmaybemuchmoreexpansive,thetimelinetogetitdone muchshorter,andtheresultingoperationalcomplexitymuchhigher. government- Governments will also inject fresh capital into the economy via SME loan guarantees and directsupportforthehardest-hitindustries.Inmarketswithgovernment-guaranteedSME guaranteed loans need lending programs – like the SBA in the US and KfW in Germany – we will see a surge of applications.Banksthataren’tstructuredtoofferthesetypesofloansshouldreachout to figure out how to to regulators to figure out how they can participate and maximize the capital deployed throughthesechannels,andpotentiallypartnerwithbanksthataresetuptoprocessthese loans. Those that do have the operational processes in place to make these loans need to participate. Those that scalecapacityquicklybytrainingstafftooriginateandprocessapplications,andsimplyto beawareoftheoptionsthatareavailabletoborrowers.One of the challenges is that, while are, need to scale the intent from many governments to provide support is clear, it is hard for banks to scale capacity before the qualification criteria and application process have been detailed. capacity quickly by With ideas like “writing a check to everyone” being considered in the US, the industry should have a collective response in each market to make the fiscal stimulus process as trainingstafftoprocess efficient as possible. Back in 2008, the US government sent physical checks that took two tothreemonthstoreachconsumers–buttheaggregatedropindemandwasfarlessthan applications. weexpectinQ22020.WithP2Ppaymentnetworks,push-paymentsystemslikeVisaDirect, and other money transfer options that have appeared over the last 10 years, the industry needstobeengagedtomakeeconomicstimuluseasytodeploy.Whileitwon’tbewithus for a while, this could have been a perfect use case for Central Bank Digital Currency that couldhavebeenpushedtoregisteredand securemobilewallets. 7 COVID-19: Open letter to retail and commercial banking CEOs