Economic stagnation due to the spread of Covid-19 is putting European banks under huge new pressure, right at a time when they are still struggling to deal with the remnants of the 2008 financial crisis.

Banks in this region have changed a lot since 2008, such as increasing capital and complying with stricter regulations.

`European banks are still vulnerable and fragile after the financial crisis and debt crisis. Covid-19 has now dealt a new blow to the financial industry, making investors feel unstable`, Athanasia Kokkinogeni

Waiters at empty tables of a restaurant in Venice (Italy) on March 9.

One of the big problems left after the 2008 financial crisis is bad debt.

`If we look at capital indicators, compared to 2008, the banking sector seems better equipped to cope with shocks,` commented Maartje Wijffelaars – economist at Rabobank.

Yesterday (March 20), Deutsche Bank warned that the outbreak of the pandemic could potentially affect this year’s financial goals.

Credit Suisse also said this week that `the impact of the pandemic on our future financial results remains difficult to assess`.

Another hangover that banks face is low interest rates.

In addition to these issues, the pandemic is creating new challenges.

A man rides a bicycle on Piazza Venezuela in Rome, Italy.

`With most of Europe at a standstill, business activity and demand in the euro zone are at least as depressed as during the global financial crisis,` said Davide Oneglia – economist at

He also said that despite the ECB’s recent stimulus measures, financial crisis risks could still increase in the euro area.

The ECB will buy back 750 billion euros ($802 billion) of government and private bonds this year to reduce the economic impact of Covid-19.