Financial Services Regulation and Compliance - General Cross Sectoral Apr 2020
Domestic
The Central Bank of Ireland launches COVID-19 Information Hub
On 2 April 2020, the Central Bank of Ireland (CBI) launched its COVID-19 information hub – an online hub containing information for consumers, SMEs, and regulated firms. It features FAQs, COVID-19-related statements and press releases by the CBI and the European Supervisory Authorities, as well as Governor Makhlouf's new blog (see below).
The CBI publishes its Quarterly Bulletin
On 3 April 2020, the CBI published its Quarterly Bulletin. The bulletin includes a detailed analysis of the impact of COVID-19 on the Irish economy, as well as a discussion of the Irish and European policy responses to the crisis.
Governor of the CBI launches COVID-19 blog
The Governor of the CBI, Gabriel Makhlouf, has launched a blog on the CBI's website. Mr Makhlouf explained in the first post that the CBI should explain its decisions, set out the context in which they are being bade, and help the public understand why it is making them and what it is aiming to achieve. The posts so far have focused on the impact of COVID-19 and the responses to it.
The second post considers the Irish economy in a global context. Ireland’s highly-globalised nature is highlighted in the blog post; as a small and globalised economy, we are more vulnerable to global developments and structural macroeconomic shocks, but this openness and connectedness is also recognised as a strength. Mr Makhlouf also addresses the IMF's biannual update for the global outlook, and states his own scepticism about a "V-shaped recovery" – he expects recovery to be a more gradual process. Mr Makhlouf then outlines the Central Bank's analysis of the severe impact of COVID-19 on the Irish economy.
A third blog post relates to the role of the financial system in the economy as it copes with the impact of COVID-19. The Governor emphasises that the focus of the CBI and its European counterparts is to absorb – not amplify – the economic shock, and to support the recovery of the economy. The actions being taken to achieve this can be seen in two overlapping and inter-related phases: First, ensuring that the financial system is better placed to support households and businesses through the crisis and, secondly, supporting the recovery out of the crisis.
The CBI publishes two research papers using real-time data on economic impact of COVID-19
The CBI has published two research papers on the economic impact of COVID-19, using real-time economic data. The first paper examines the effect of the pandemic on job postings, both globally and in Ireland, while the second examines the impact on retail card usage in Ireland since the onset of the COVID-19 crisis. The CBI is working to develop a number of real-time indicators of economic developments during the current crisis.
According to the findings, jobs that are directly exposed to the COVID-19 restrictions, such as beauty & wellness and hospitality & tourism, are experiencing the fastest drop in job opportunities (80% and 76% declines respectively). In terms of retail card spending, the paper found that while card spending initially increased, the value of both spending and ATM withdrawals experienced a steep decline from mid-March.
European
ESAs consult on ESG disclosure rules
The European Supervisory Authorities (EBA, EIOPA, and ESMA – the ESAs) have launched a consultation on proposed environmental, social and governance (ESG) disclosure standards for financial market participants, advisers, and products. The standards have been developed under the EU Regulation on sustainability-related disclosures in the financial services sector and aim to:
- strengthen the protection for end-investors
- improve the disclosures to investors from financial market participants and advisers
- improve the disclosures to investors regarding financial products
The consultation paper also includes proposals under the regulation on the establishment of a framework to facilitate sustainable investment (the Taxonomy Regulation), on the "do not significantly harm" principle.
The consultation is open until 1 September 2020, following which the draft RTS developed by the ESAs will be finalised and submitted to the European Commission.
European Commission extends State Aid Temporary Framework
The European Commission has adopted an amendment to the State aid Temporary Framework adopted on 19 March 2020 (covered in our March Bulletin) to enable Member States to accelerate the research, testing and production of COVID-19 relevant products, to protect jobs, and to further support the economy. The amendment expands on the existing types of support that Member States can grant to companies in need, with new measures which should be particularly helpful in quickly addressing the liquidity needs of SMEs.
The Temporary Framework will be in place until the end of December 2020. The European Commission will assess before then whether the measures need to be extended.
For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.
Date published: 11 May 2020