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


The Basel Committee on Banking Supervision sets out additional measures to alleviate the impact of Covid-19 on the global banking system. These include publishing technical clarifications to ensure that banks reflect the risk-reducing effect of extraordinary support measures introduced by governments when calculating their regulatory capital requirements.

Also says banks should use the flexibility inherent in expected credit loss frameworks to take account of the mitigating effect of the extraordinary support measures related to Covid-19. With IOSCO it also agrees to extend by one year the deadline for completing the final two implementation phases of the margin requirements for non-centrally cleared derivatives. 

European Investment Bank issues €1bn eight-year sustainability awareness bond (SAB) with proceeds earmarked for its lending activities contributing to sustainability objectives, including universal access to affordable health services, one of the UN Sustainable Development Goals. EIB reported the bond was seven times oversubscribed. Eligibility for EIB’s SABs are being extended to additional areas of EIB’s financing directly related to the fight against COVID-19 pandemic.

EIOPA adds to regulatory pressure on dividend payments, urging (re)insurers to temporarily suspend all discretionary dividend distributions and share buy backs, and to apply a similarly “prudent approach” to variable remuneration policies. The European Central Bank and Bank of England had already issued calls for banks to refrain from dividend payments. Earlier this week Morgan Stanley analysts said that based on company announcements so far, companies accounting for 17% of total EU dividends have already cut or suspended payouts.

EIOPA Frankfurt

EIOPA’s offices in Frankfurt

The UK’s TPR extends deadline for feedback on the first leg of a consultation on the proposed defined benefit funding code; new deadline is 2 September. TPR also updates guidance in relation to the impact of COVID-19 (coronavirus) on scheme administration, which is under “huge pressures”. Points mentioned include the need for vigilance and making sure members are not rushed into any financial decisions.

US Bureau of Labor Statistics reports numbers showing that US nonfarm payroll employment fell by 701,000 in March, but warns figures only reflect “some of the early effects” of the pandemic. Ronald Temple, head of US equity at Lazard Asset Management, says: “This is only the beginning of the record-setting increase in unemployment.”


Decision announced to postpone COP26 UN climate change summit that was due to take place in Glasgow in November. “Ambitious, inclusive” summit to be held next year instead. UN climate change executive secretary Patricia Espinosa warns that although “COVID-19 is the most urgent threat facing humanity today, […] we cannot forget that climate change is the biggest threat facing humanity over the long term”.

UK government announces extension of closing date on consultation on draft non-statutory guidance for occupational pensions on assessing, managing and reporting climate-related risks, in line with the TCFD recommendations. New deadline for submissions is 2 July.

EIOPA urges insurers and intermediaries to mitigate the impact of Coronavirus/COVID-19 on consumers, saying unfair treatment of consumers as a result of market disruption was a risk to the entire sector.

While highlighting the need for flexibility in the interest of consumers and for their continued fair treatment, the EU supervisory authority also noted that imposing retroactive coverage of claims not envisaged within contracts could create material solvency risks and ultimately threaten policyholder protection.

Federal Reserve announces temporary change to its supplementary leverage ratio rule to ease strains in the Treasury market and encourage more bank lending 

In the UK, TPR and the FCA, supported by The Money and Pensions Service, jointly warn savers not to rush to make decisions about their pensions in response to the COVID-19 pandemic, and to beware scams.

Financial Reporting Council reports that Pre-Emption Group recommends investors, on a case-by-case basis, to consider allowing companies to issue up to 20% of their issued share capital without offering shareholders a first right of refusal. Current best practice is for companies not to issue more than 10% of issued share capital in aggregate without shareholders having first dibs.

The group says principles of pre-emption are an important shareholder protection feature of the UK securities market, but “in the unparalleled economic situation that we all currently face as a result of the COVID19, investors clearly want the companies in which they are invested to have access to the capital they need to maintain their solvency”.


Federal Reserve announces establishment of a temporary repurchase agreement facility to allow foreign central banks to swap Treasury securities for cash.

UK government extends to 16 July the deadline for responses to a consultation on proposals to expand the dormant assets scheme to include new financial assets, including from pensions.


UK’s Pensions Administration Standards Association (PASA) announces new guidance to support administrators during the COVID-19 crisis. Administrators told to concentrate on continuing to pay promised benefits, and focus “on the processes of greatest benefit to members”.

The Come By Chance refinery in Newfoundland and Labrador, Canada, becomes the first North American refiner to shut operations during the coronavirus pandemic, McKinsey has said.


Italian prime minister announces a new €4.3bn package of fiscal stimulus measures.


The Basel Committee’s oversight body endorsed a deferral by one year the implementation date of Basel III standards finalised in December 2017. The timeline for several other measures was also revised, with the aim of freeing operational capacity for banks and supervisors “to respond to the immediate financial stability priorities resulting from the impact of the coronavirus disease on the global banking system”.

ESMA launches public consultation on its draft guidance to address leverage risks in the Alternative Investment Fund sector, part of its response to 2018 recommendations of the European Systemic Risk Board.


At the conclusion of an extraordinary summit held by video conference, the G20 states it is committed to do whatever it takes to overcome the pandemic, along with the World Health Organization, International Monetary Fund (IMF), World Bank, United Nations, and other international organisations, working within their existing mandates. Refers to the G20 injecting more than $5trn into the global economy.

US Labor Department reveals more than three million people filed a claim for unemployment benefits in the US. “A significant step on the road to measuring the extent of macro damage coming from the COVID-19 pandemic and subsequent lockdown,” says Florian Ielpo, head of macroeconomic research, at Unigestion.

In the UK, the FCAFinancial Reporting Council (FRC) and Prudential Regulation Authority (PRA) publish a joint statement to announce “a series of actions to ensure information continues to flow to investors and support the continued functioning of the UK’s capital markets”. This included:

  • A statement by the FCA allowing listed companies an extra two months to publish their audited annual financial reports;
  • Guidance from the FRC for companies preparing financial statements in the current uncertain environment, complemented by guidance from the PRA regarding the approach that should be taken by banks, building societies and PRA-designated investment firms in assessing expected loss provisions under IFRS9;
  • Guidance from the FRC for audit firms seeking to overcome challenges in obtaining audit evidence.


u.s congress

US Congress

US Congress approves $2trn stimulus package.

IMF launches tracker of policies governments are taking in response to COVID-19, summarising key economic responses with a focus on discretionary actions that supplement existing social safety nets and insurance mechanisms.

EFAMA and 20 other financial associations called for a delay in the compliance dates for initial margin requirements for non-centrally cleared derivatives to account for problems companies are facing due to the COVID-19 pandemic.

IOSCO announces its members, which regulate over 95% of the world’s capital markets, are cooperating closely on their responses to the disruption in capital markets resulting from the macroeconomic impact of COVID-19 on the global economy.

ESMA and EBA issue statements about accounting and prudential framework implications of measures taken in response to the COVID-19 outbreak.

Corona bonds” call: Nine euro-zone countries, including France, Italy and Spain but not Germany, call for issuance of joint European debt to help finance the fight against COVID-19.

ECB publishes details of PEPP, its €750bn pandemic emergency purchase programme, scrapping issuer limits and including bills as short as 70 days in the programme. Staff at ING said the official legal decision “laid out a flexibility going well beyond what was initially announced”.

Rating agency Scope notes that the primary bond market had shown itself to be open to business, with $150bn of new hard-currency deals priced in the US and Europe in seven trading days to 24 March, 36% more than the same period of 2019.


US Congressional leaders agree $2trn stimulus package.

Bank of England activates its Contingent Term Repo Facility, a tool that allows participants to borrow cash for other, less liquid assets. It will run for two weeks, lending reserves for a period of three months.


The US Securities and Exchange Commission announced it would allow temporary flexibility for certain registered funds to borrow and to enter into certain other lending arrangements. The move is to help registered funds manage their portfolios as investors may seek to rebalance their investments.

The UK’s FCA said short-selling was not to blame for recent market falls, and that it was working with international counterparts so that markets could remain open and orderly. 

The Federal Reserve announces a suite of measures aimed at addressing liquidity and funding issues in US financial markets, providing a backstop for the majority of private sector liabilities. Measures include removing the previous $700bn limit on quantitative easing and a facility to buy corporate bonds in the primary market. It said it expected to soon announce a programme to support lending to eligible small-and-medium sized businesses. BlackRock appointed to run three new easing programmes.