The government response to the COVID-19 outbreak so far has amounted to SGD 54.8 billion – about of 11% of GDP.

The economy is entering uncharted waters, and the level of stimulus is unprecedented as Singapore faces both acute supply and demand shocks.

The Impact of These Measures on Singapore Banks

When you invest into banks like Oversea-Chinese Banking Corp (SGX:O39), United Overseas Bank Ltd  (SGX:U11) & Dbs Group Holdings Ltd (SGX:D05) you are not only investing in them directly but also indirectly the quality of governance and the strength of the regulator.

The SG Government has often acted to reduce potential bubbles from being formed (e.g. cooling measures to dampen the en-bloc cycle).

In this instance, they are acting to blunt the economic fallout from what maybe Singapore’s deepest recession on record.

A recession will lead to lower loan growth as the economy slows down. It also means higher non-performing loans (NPLs) as