Online Debate discusses SSM supervisory measures in the context of the COVID-19 pandemic
The banking sector is at the crossroads to mitigate the adverse economic effects of the current COVID-19 pandemic. While banks were in turmoil during the last financial crisis, this time they may prove instrumental in coping with the COVID-economic aftermath by sustaining their intermediary role in the real economy. In the euro area, the European Central Bank (ECB) adopted measures in its supervisory competence to ensure banks fulfil their lending role to households and businesses. The ECB adopted supervisory measures on temporary capital and operational relief, with the relaxation of some buffers e.g. allowing banks to go below the Pillar 2 Guidance (P2G), the Capital Conservation Buffer (CCB) and the liquidity coverage ratio (LCR) or adapting the composition of capital for Pillar 2 Requirements (P2R). The ECB also introduced flexibility regarding the treatment of non-performing loans (NPLs), as well as recommended the adoption of transitional IFRS 9 rules, amongst others.
On 28 May 2020, the online debate “SSM supervisory measures in the context of the COVID-19 pandemic” examined those supervisory measures and discussed the implications of temporary measures for supervisors and banks. The debate was moderated by Elena Carletti (Bocconi University and Florence School of Banking and Finance, European University Institute) and featured as speakers Edouard Fernandez-Bollo (ECB Supervisory Board), Thorsten Beck (Cass Business School) and Til Schuerman (Oliver Wyman).