The banking sector, especially the credit market, is a key component of fi-nancial systems (Longstaff and Wang, 2012). Events like the COVid-19 pandemic and the global financial crisis have underscored how shifts in credit accessibility can greatly influence both asset values and econom-ic conditions. in the aftermath of the 2008–2009 financial crisis, the cred-it channel became a central focus of monetary policy transmission, em-phasizing its importance in driving economic outcomes (Heryán and Tzeremes, 2017). Central banks are at the centre of the credit channel mechanism, and the changes in the policy stances of central banks play the leading determinant role in the expenditures of economic units through the banking sector, which provides financial intermediation (gambacorta and Marques-ibanez, 2011; McPhilemy and Moschella, 2019; Ferrara et al., 2022). The global credit conditions during the pandemic period were char-acterized by a mix of tightening and easing measures implemented by central banks and financial institutions worldwide. At the onset of the pandemic, as economies faced abrupt shocks and heightened uncertainty, credit conditions tightened significantly due to financial market volatility and liquidity pressures. in response, central banks implemented aggres-sive monetary policies, such as cutting interest rates and injecting liquidi-ty, to stabilize markets and maintain the flow of credit.

Many central banks maintained supportive monetary policies as the pandemic spread to aid in the recovery of the economy. To give finan-cial markets liquidity, the U.S. Federal reserve, for instance, conducted a number of asset purchase programs and maintained interest rates close to zero. Similarly, the European Central Bank and other major central banks pursued similar measures to ease credit conditions and support lending to households and businesses...