The credit hits are massive. The big 3 Japanese banks just announced credit provisions of ¥1.1tn ($10bn)for their current financial year. This after US and European banks collectively providing $50bn for credit losses in the first quarter.
Financial Times: Japan’s megabanks estimate a collective ¥1.1tn in credit costs
A growing number of central banks are warning of risks to financial stability, mainly from bank exposures to non performing corporate and household debt, but also from excessive risk concentration to asset management and hedge fund sectors.
Some central banks suspended bank dividends, others wish they had. Other policy measures such as reduced reserve requirements in several jurisdictions are more about relieving liquidity pressures on banks as repayments freeze than stimulating more lending.
In EME's the weak banks going into this crisis are going to be seriously struggling as the scale of credit hits becomes understood. Expect to see a flight to quality in each market as the situation unfolds. This will dial up the pressure on the outliers. Thereafter, expect hastily arranged banking consolidation, much as was seen post AFC and GFC.
The banks and central banks are better prepared this time, but expect some casualties..