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Aki Corsoni-Husain
Aki Corsoni-Husain
  • Aki Corsoni-Husain

  • Partner
  • Cyprus
George Apostolou
George Apostolou
  • George Apostolou

  • Partner
  • Cyprus
Jermaine Case
Jermaine Case
  • Jermaine Case

  • Associate
  • British Virgin Islands
Chiara Deceglie
Chiara Deceglie
  • Chiara Deceglie

  • Partner
  • Luxembourg
Massimiliano della Zonca
Massimiliano della Zonca
  • Massimiliano della Zonca

  • Senior Associate
  • Luxembourg
Philip Graham
Philip Graham
  • Philip Graham

  • Partner
  • British Virgin Islands
Ayana Hull
Ayana Hull
  • Ayana Hull

  • Counsel
  • British Virgin Islands
Katerina Katsiami
Katerina Katsiami
  • Katerina Katsiami

  • Associate
  • Cyprus
Petros Kiteos
Petros Kiteos
  • Petros Kiteos

  • Associate
  • Cyprus
Andrew Knight
Andrew Knight
  • Andrew Knight

  • Partner
  • Luxembourg
Evi Koutsioumpa
Evi Koutsioumpa
  • Evi Koutsioumpa

  • Associate
  • Luxembourg
Joshua Mangeot
Joshua Mangeot
  • Joshua Mangeot

  • Counsel
  • British Virgin Islands
Mirza Manraj
Mirza Manraj
  • Mirza Manraj

  • Counsel
  • Hong Kong
Elina Mantrali
Mirza Manraj
  • Elina Mantrali

  • Associate
  • Cyprus
Vanessa Molloy
Vanessa Molloy
  • Vanessa Molloy

  • Partner
  • Luxembourg
Andrea Moundi Savvides
Andrea Moundi Savvides
  • Andrea Moundi Savvides

  • Associate
  • Cyprus
Marina Stavrou
Marina Stavrou
  • Marina Stavrou

  • Associate
  • Cyprus
Matt Taber
Matt Taber
  • Matt Taber

  • Partner
  • Cayman Islands
Carolynn Vivian
Carolynn Vivian
  • Carolynn Vivian

  • Senior Associate
  • Cayman Islands

Round up of EU banking regulators issue updates and advisories on COVID-19

EBA

On 12 March 2020, the European Banking Authority (EBA), issued an announcement informing the sector that alongside national competent authorities (CAs) and the European Central Bank, it is coordinating a joint effort to alleviate the immediate regulatory and operational burden for banks during the COVID-19 outbreak.

Mostly importantly the EBA confirms that banks can fully use capital and liquidity buffers, including Pillar 2 Guidance (P2G) and will benefit from relief in the composition of capital for Pillar 2 Requirements. By way of background, capital and liquidity buffers have been designed under the European capital adequacy regime (CRD IV and V) with a view to allowing banks to withstand stressed situations like the current one. The European banking sector has built up a significant amount of these buffers. The ECB will allow banks to operate temporarily below the level of capital defined by the P2G (link included below), the capital conservation buffer (CCB) and the liquidity coverage ratio (LCR).

In terms of operational matters the EBA also advises as follows:

• CAs may make full use, where appropriate, of the flexibility included in the regulatory framework to support the banking sector

• it has decided to postpone EU-wide stress testing exercises until 2021 enabling banks to focus on and ensure continuity of their main operations, including support for their customers

• it recommends that CAs can organise supervisory activities appropriately, including postponing on-site inspections and other activities which are non-essential

• banks should follow prudent dividend and other distribution policies, including in relation to performance-related remuneration.

ECB

On 12 March, 2020, the European Central Bank (ECB) issued a press release advising that the guidance to banks on non-performing loans (NPLs) (a copy the guidance can be found here) provides supervisors with sufficient flexibility to adjust to the banks’ specific circumstances. The ECB will also consider extending deadlines for certain non-critical supervisory measures and data requests. In light of the operational pressure on banks, the ECB supports the decision by the EBA to postpone the 2020 EU-wide stress test and will extend the postponement to all banks subject to the 2020 stress test.

The ECB, echoing the EBA, confirms that it will also allow banks to fully use capital and liquidity buffers and operate temporarily below the level of capital defined by the P2G (found here).

A press conference was also held on 12 March 2020 by Christine Lagarde, President of the ECB and Luis de Guindos, Vice President of the ECB, outlining current developments within the global and euro area economies and financial market volatility. The press conference can be found here.

EBA’s announcement can be found here.
ECB’s press release can be found here.