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COVID-19 - Impact on Financial Sector - 3 April 2020

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03/04/2020

Please find below a summary of COVID-19 developments relevant to our clients; 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

 

2/04/2020

Coronavirus: the Commission mobilises all of its resources to protect lives and livelihoods

The European Commission proposes to set up a €100 billion solidarity instrument to keep people in jobs and businesses running. The SURE-initiative will provide up to €100 billion in loans to countries that need it to ensure that workers receive an income and business keep their staff. Further, it is also proposing to redirect all available structural funds to the response to the coronavirus.

2/04/2020

 

COVID-19: explanations on the application of the MiFID II provisions on recording telephone conversations

 

The FSMA confirms the ESMA position on call taping under MiFID II. For more information on this ESMA position, we refer to our alert of 23 march 2020.

2/04/2020

ESMA updates its risk assessment in light of the COVID-19 pandemic

ESMA has updated its risk assessment, where it monitors and assesses market development and new financial activities, to account for the impact of the Covid-19 pandemic. In combination with existing valuation risks, Covid-19 has led to large equity market corrections since mid-February, driven by a sharp deterioration in the outlook for consumers, businesses and of the economic environment. Corporate bond, government bond markets and a number of investment funds show signs of stress. Market infrastructures have continued to function in an orderly manner despite significant surges in trading activity, the use of circuit breakers and increases in derivatives margins. ESMA sees a prolonged period of risk to institutional and retail investors of market corrections and very high risks across the whole of ESMA’s remit.

2/04/2020

EBA publishes Guidelines on treatment of public and private moratoria in light of COVID-19 measures

The EBA published today more detailed guidance on the criteria to be fulfilled by legislative and non-legislative moratoria applied before 30 June 2020. The aim of these Guidelines is to clarify the requirements for public and private moratoria, which if fulfilled, will help avoid the classification of exposures under the definition of forbearance or as defaulted under distressed restructuring.

The EBA sees the payment moratoria as effective tools to address short-term liquidity difficulties caused by the limited or suspended operation of many businesses and individuals resulting from the impact of Covid-19.

In this context, the Guidelines clarify that payment moratoria do not trigger classification as forbearance or distressed restructuring if the measures taken are based on the applicable national law or on an industry or sector-wide private initiative agreed and applied broadly by the relevant credit institutions.

2/04/2020

ECB extends review of its monetary policy strategy until mid-2021

The Governing Council of the ECB has decided to extend the timeline for the review of its monetary policy strategy. In the current situation, the decision-making bodies and staff of the ECB and the national central banks of the Eurosystem are focusing all their efforts on addressing the challenges posed by the coronavirus pandemic. The conclusion of the strategy review will therefore be postponed from the end of 2020 to mid-2021.

2/04/2020

Agriculture and bioeconomy: EIB approves €700 million of financing under the Investment Plan for Europe amid coronavirus pandemic

The EIB announced the launch of a new financing initiative that aims to unlock close to €1.6 billion of investment in the agriculture and bioeconomy sector. The financing aims to support private companies operating throughout the value chains of production and processing of food, bio-based materials and bioenergy and will help make the sector more resilient in light of Covid-19. The lending programme will enable direct lending for private sector investments ranging from €15 million to €200 million, with the EIB loan amount ranging from €7.5 million to €50 million.


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