A weekly roundup of select COVID-19-related policy and market developments.


Federal Reserve announces new and expanded lending programmes to provide up to $2.3trn in loans to support the US economy. Funding to help households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic. 

“The Fed rode to the rescue again with funding for businesses and state and local governments,” says Ronald Temple, co-head of multi-asset and head of US equity at Lazard Asset Management. “Importantly, the $2.3 trillion of funding announced today is backed by $195bn of the $454bn allocated in the CARES Act, meaning there is plenty more dry powder available if needed.”

Bank of England and HM Treasury announce an agreement to temporarily extend the use of the government’s “Ways and Means” facility, described by the FT as making the UK the first country to embrace monetary financing of government to fund the immediate cost of fighting the coronavirus pandemic. 

Neil Williams, senior economic adviser to the international business of Federated Hermes, says: “The overdraft extension is only to be expected in the current environment, given that there is limited monetary ammunition left, the UK’s fiscal gun is now firmly on, and this tool has been used as a last resort in the past, as we saw in 2008. 


Bank of England

“What would be telling now, is if it’s extended indefinitely, which might further blur the operational distinction between the fiscal and monetary authorities, a demarcation that may inevitably be brought into question as Gilt issuance escalates and QE moves toward infinity and beyond.”

Bank of England also announces that Financial Policy Committee will publish an additional interim Financial Stability Report given the recent development. The report will be published on Thursday 7 May, alongside the May monetary policy report issued by the Monetary Policy Committee.

The UK’s Pensions Regulator (TPR) publishes new guidance for employers about their automatic enrolment (AE) duties during the coronavirus pandemic. Minimum correct contributions must be made on time but if certain conditions are met employers will be allowed to reduce contributions into certain workers’ defined contribution pensions to the statutory minimum without the normal process of consultation. 


IOSCO announces it is reprioritising its work programme to address the impact of COVID-19. Among other things, it says, substantial resources are being devoted to addressing areas of market-based finance that are most exposed to heightened volatility, constrained liquidity and the potential for pro-cyclicality.

Work being delayed or paused includes IOSCO’s analysis of the use of AI and machine learning by market intermediaries and asset managers, and the impact of the growth of passive investing and potential conduct-related issues in index provision. 


International Labour Organisation says COVID-19 crisis is expected to wipe out 6.7 per cent of working hours globally in the second quarter of 2020, equivalent to 195 million full-time workers. Says huge losses expected across different income groups but especially in upper-middle income countries (7 per cent, 100 million full-time workers), far exceeding the effects of the 2008-9 financial crisis.

Japanese government declares state of emergency and announces stimulus package of nearly $1trn.

John Vail, chief global strategist, Nikko Asset Management, said: “Japan is wisely targeting a large portion of the stimulus to individuals, families, small and mid-size businesses who can prove they have been severely impacted economically by the crisis. The documentation required is significant, but the minimum required to prevent fraud. 

“The stimulus package also includes government subsidies to kick in after the virus subsidies, earmarked to boost demand for some of the most affected sectors like tourism and restaurants, which should help them weather the storm. For companies, there do not seem to be many grants, but rather loans.”

UK’s Financial Conduct Authority (FCA) sets out business priorities for the year ahead, with specific focus on challenges presented by the coronavirus pandemic. On a non-COVID-19 note, it says it sees “significant harm of risk” for consumers in the pensions market, in part driven by the effect of the 2015 pension freedoms reform.


Bank of England announces its term funding scheme for small and medium-sized enterprises (TFSME) will open for drawings on 15 April, sooner than previously anticipated. The programme complements other schemes announced by the central bank and HM Treasury aimed at supporting households and businesses during the economic disruption caused by measures to contain the coronavirus. 

European Commission unlocks €1bn from the European Fund for Strategic Investments (EFSI) that will serve as a guarantee to the European Investment Fund, in turn allowing the EIF to issue special guarantees to incentivise banks and other lenders to provide liquidity to European SMEs and small mid-cap companies hit by the economic impact of the coronavirus pandemic, for an estimated available financing of €8bn. The move implements one of a package of measures announced by the EIB Group in mid-March. 

Last week’s roundup: COVID-19 roundup: EIOPA adds to dividend pressure, COP26 postponed