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COVID-19 - Impact on Financial Sector - 15 June 2020

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15/06/2020

Please find below a summary of  COVID-19 developments of last week (8/6 until 12/6 included); these alerts are dedicated to following up on the financial  regulators’ responses to the crisis. We have also created a COVID-19 Resource Center to offer legal and business insights as this crisis continues to evolve. We wish you and your loved ones well.

If you have any questions please feel free to contact: 

Tom Van Dyck
+32 475 90 90 91
t.vandyck@liedekerke.com

Freya Mareels 
+32 475 25 11 50
f.mareels@liedekerke.com

Wim Dedecker
+32 491 36 03 99
w.dedecker@liedekerke.com

 

8/06/2020

Royal Decree of 8 June 2020 – Regulatory Solutions to Difficulties Encountered by Financial Intermediaries as a Result of the Covid-19 Public Health Crisis

 

For PCPs in training in the insurance sector: since only a limited number of examination sessions are organised, it has been decided to grant an additional period of 4 months to each PCP in training for whom the lockdown falls wholly or partly within the aforementioned period of 1 year. 

For upskilling: persons required to undergo upskilling training may have difficulty attending the in-service training, both during the lockdown and after the relaxation or lifting of the coronary measures. It has therefore been decided to grant an additional period of 4 months to persons for whom the upskilling training period expires at the end of 2020. 

   
9/06/2020

Belgian economic activity is expected to shrink by a further 16 % in the second quarter of 2020

 

Belgian GDP growth is likely to take a steep dive in the second quarter of 2020. As regards the demand components, private consumption will plummet, as consumption possibilities have been constrained by the containment measures during several weeks. Consumer confidence has plunged, despite the as yet limited impact of the crisis on household incomes. Government consumption growth is expected to be slightly positive due to extra COVID-19-related spending. Business investment is likely to shrink even more: very weak business sentiment indicators reflect the large uncertainty about the global economic outlook as well as the financial strains on companies. Also according to survey indicators, companies are massively postponing investment plans. Housing investment should decline as well, after real estate transactions fell and the building industry came to a temporary halt. Finally, the contribution of net exports to GDP growth is likely to be close to neutral in the second quarter, as the recent COVID-19 developments would depress both import and export growth.

   
8/06/2020

The Belgian economy’s recovery from the coronavirus crisis will be difficult, and the budget deficit in 2022 will still be twice as large as before the crisis

 

This year, economic activity in Belgium is down by 9 % as a result of the restrictions imposed to prevent the spread of the COVID-19 pandemic. As these restrictions are eased, the economy should gradually recover. Concerning real GDP, a year-on-year growth of 6.4 % in 2021 and 2.3 % in 2022 is expected. Nevertheless, even at the end of 2022 GDP will still be around 4 % below the level that was projected before the crisis and the Belgian economy will thus suffer permanent damage from the health crisis. Public finances will likewise be hard hit: the budget deficit will climb to more than 10 % of GDP in 2020. More importantly, even after that the deficit will remain structurally high, at more than twice the level that would have been reached without the crisis.

   
12/06/2020

Belgian banks provide more than 253,000 times payment delay to individuals and businesses

 

Febelfin reports that banks continue to fully support consumers, companies and the self-employed who are under financial pressure due to the corona crisis. As of March 31, 2020, they granted 121,651 deferred payments to private individuals for their mortgage credit. The total underlying credit volume amounts to EUR 12.8 billion or an average of EUR 105,175 per credit.

As far as companies are concerned, banks have granted 131,705 deferments for corporate loans since 31 March. In total, this concerns an underlying credit volume of EUR 21.9 billion or an average of EUR 166,021 per credit. More than 80% of the number of payment deferrals is granted to SMEs and the self-employed.

   
11/06/2020

Newsletter: royal decree of 8 june 2020* – regulatory solutions to difficulties encountered by financial intermediaries as a result of the covid-19 public health crisis

 

At the request of the FSMA, the Ministers of Economy, Finance and the Middle Classes adopted a royal decree on 8 June 2020 to extend the periods for PCPs in training in the insurance sector and upskilling training (see above). 

   
11/06/2020

ESMA publishes statement on MiFIR open access and COVID-19

 

ESMA has issued a public statement to clarify the application of the MiFIR open access provisions for trading venues and central counterparties in light of the recent adverse developments related to COVID-19.

   
11/06/2020

ESMA renews its decision requiring net short position holders to report positions of 0.1% and above

 

ESMA has renewed its decision to temporarily require the holders of net short positions in shares traded on a European Union regulated market to notify the relevant national competent authority if the position exceeds 0.1% of the issued share capital.

   
9/06/2020

ESMA extends deadline for responses to consultation on EMIR REFIT

 

ESMA has decided, in view of the effects of the ongoing COVID-19 pandemic on stakeholders and market participants, to extend the response date for the consultation on the technical standards on reporting, data quality, data access and registration of Trade Repositories under EMIR REFIT to 3 July 2020.

   
8/06/2020

EBA releases bank-by-bank data at the start of the COVID-19 crisis

 

EBA has published the seventh EU-wide transparency exercise. This additional data disclosure comes as a response to the outbreak of COVID-19 and provides market participants with bank-level data as of 31 December 2019, prior to the start of the crisis. The data confirms the EU banking sector entered the crisis with solid capital positions and improved asset quality, but also shows the significant dispersion across banks.

   

12/06/2020

New EIB report: Banks in Central, Eastern and Southeastern Europe revise outlook for the coming months sharply

 

A new EIB report, the CESEE Bank Lending Survey, provides insights into banking group activities and business expectations in Central, Eastern and Southeastern Europe (CESEE). The report analyses portfolios, demand and supply for financing and the development of non-performing loans. The new edition includes a special analysis on banking group expectations before and after the impact of the coronavirus pandemic.

   
11/06/2020

EIB approves EUR 7.5 billion for COVID-19 response and investment in health, private sector, clean transport, education and energy

 

EIB has approved EUR 7.5 billion of new financing for projects across Europe and around the world. This includes investment to improve public health, hospital and elderly care facilities and dedicated new business lending programmes to support sectors most impacted by the COVID-19 pandemic. 

  • EUR 3.2 billion for COVID-19 public health, elderly care and targeted business support

  • EUR 1.5 billon for clean transport, including electric vehicle, high speed rail and public transport

  • Additional backing for higher education, renewable energy and urban development

  • EUR 1.9 billion for health and private sector investment outside Europe

   
9/06/2020

EU Finance Ministers welcome rapid EIB response to COVID-19 crisis

 

At the Annual Meeting of the EIB Board of Governors, meeting for the first time by video conference, finance ministers have highlighted the significant impact of the EU Bank’s immediate response to mobilise EUR 40 billion of new investment since the start of the COVID-19 crisis and recent agreement to mobilise EUR 200 billion through the new pan-European Guarantee Fund identified as crucial for reducing the economic impact of the pandemic.

 

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