Abstract: This paper examines the short-term impact of the coronavirus (COVID-19) outbreak on the banking system's critical transitions (bifurcation points) in all affected countries across the globe. The consequences of infectious disease are considerable and have been directly affecting the banking system across the world. Using the Lotka-Volterra complex system theory approach, this study develops the complex dynamical model for investigating the role of the pandemic outbreak towards the banking system's critical transitions. Our results confirm that the banking system in major affected economic zones fell quickly during the critical virus outbreak. The Eurozone experienced more negative financial disruptions during the crisis than other economic zones. Further results confirmed that the promotion of the banking system z-score fosters the critical transitions to large values and thus, promotes an exponential growth of the banking system. Moreover, the study of banking systems can be applied as a risk mitigation approach to reduce economic shocks, increase banking sector resilience, and avoid financial collapse.
Keywords: critical transitions; banking system resilience; inflation; Lotka-Volterra theory; economic zone; system bifurcation.
Title: The Impact of COVID-19 on Banking System Critical Transitions
Author: Christopher Gothelf Manjeka, Joseph David Madasi
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Vol. 10, Issue 2, October 2022 - March 2023
Page No: 102-115
Research Publish Journals
Website: www.researchpublish.com
Published Date: 26-October-2022
