Prudential Regulatory Measures1 in Response to COVID-19 (as of September 30, 2020)
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Prudential Regulatory Measures1 in Response to COVID-19 (as of September 30, 2020) * indicates no recent updates Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures FSB March 20: FSB encouraged local March 20: FSB encouraged use of * April 2: FSB issued a statement April 1: The G20 Finance Ministers authorities to support use of liquidity buffers to support clients summarizing its coordination and Central Bank Governors capital buffers by banks to extend and ensure functioning of activities, its work on assessing published a release following their credit. The FSB also announced markets. financial vulnerabilities and virtual meeting on March 31 coordination efforts among July 15: FSB supported the BCBS setting out its re-prioritized 2020 setting out a range of measures authorities. statement on buffer usage and work program and the criteria including working with the FSB in July 15: FSB supported the BCBS announced that supervisors have under which this prioritization is coordination of regulatory policy statement on buffer usage and agreed that banks will be given being determined. responses. announced that supervisors have sufficient time to restore buffers, September 7: FSB extended the April 11: FSB issued a letter to agreed that banks will be given taking into account economic and implementation dates by one year G20 finance ministers and central sufficient time to restore buffers, market conditions and for its policy recommendations bank governors on its vision for taking into account economic and individual bank circumstances. related to minimum haircut post-COVID-19 recovery, including market conditions and standards for non-centrally evaluating the effects of reforms individual bank circumstances. cleared securities financing and facilitating a smooth transactions. transition from LIBOR. April 15: FSB published a report summarizing the principles guiding its COVID-19 work, the key response measures taken to date, financial stability implications and future work. 1 This document captures prudential, securities and related regulatory measures adopted internationally. It does not capture fiscal, monetary and related measures. For access to an IIF compilation of such measures please follow this link: https://www.iif.com/covid-19 and then navigate to the “COVID-19 Global Policy Response Summary.” iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 1
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures April 15: G20 Finance Ministers and Central Bank Governors published a communique in which they committed to use their power to support the economy during COVID-19 and stated their support of the financial measures countries have taken in response to the pandemic. May 26: FSB, in cooperation with BCBS, CPMI, IAIS and IOSCO held a meeting with public and private participants and discussed the effectiveness of prudential and other financial policy measures taken to date, including experiences with their implementation. They also discussed policy issues going forward. July 1: FSB released a statement on the impact of COVID-19 on global benchmark reform. July 15: FSB published a letter from the Chair and a report to G20 Finance Ministers and Governors on the financial stability implications of, and policy measures taken in response to, the COVID-19 pandemic. iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 2
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures BCBS March 20: BCBS announced its March 20: BCBS supported use of April 3: BCBS published guidelines March 20: BCBS said it April 8: BCBS will not collect Basel support for use of capital buffers liquidity buffers and encouraged on including the risk-reducing temporarily suspended all open III monitoring data for the end- by banks to accommodate credit the use of HQLA stocks. effect of measures banks have consultations and postponed June 2020 reporting date to and absorb losses during the June 17: BCBS discussed the taken in response to COVID-19 jurisdictional assessments for increase operational capacity for crisis. impact of COVID-19 and when calculating regulatory remainder of 2020. banks. June 17: BCBS discussed the reiterated guidance on liquidity capital requirements. March 27: BCBS announced the September 25: BCBS approved an impact of COVID-19 and buffers. They also stated that Additionally, BCBS will amend its deferral of the Basel III updated workplan to evaluate its reiterated guidance on capital supervisors will provide banks transitional arrangements for the implementation deadline by one post-crisis reforms, which will buffers. They also stated that sufficient time to restore buffers, regulatory capital treatment of year to January 1, 2023. The incorporate lessons learned from supervisors will provide banks taking into account economic and ECL accounting. deadlines for the revised market the COVID-19 crisis. sufficient time to restore buffers, market conditions and individual risk framework and revised Pillar taking into account economic and bank circumstances. 3 disclosure requirements have market conditions and individual September 25: BCBS reiterated its also been pushed to January 1, bank circumstances. previous guidance to make use of 2023. September 25: BCBS reiterated its the Basel III capital and liquidity April 3: BCBS will defer the previous guidance to make use of buffers. implementation of the revised G- the Basel III capital and liquidity SIB framework by one year, from buffers. 2021 to 2022. April 3: BCBS and IOSCO have agreed to extend the deadline for completing the final two implementation phases of the margin requirements for non- centrally cleared derivatives, by one year to September 1, 2022. IOSCO * * April 3: IOSCO supported April 3: IOSCO and BCBS have March 25: IOSCO announced professional judgment in applying agreed to extend the deadline for coordination activities with other accounting standards rather than completing the final two standard setters and support for applying in a mechanistic manner. implementation phases of the actions designed to maintain margin requirements for non- market efficiency, liquidity and iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 3
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures centrally cleared derivatives, by access. Particular focus on one year to September 1, 2022. operational and financial April 8: IOSCO has reprioritized its resilience of FMIs and information work program to focus on the flows. direct effects of COVID-19 on May 29: IOSCO issued a market-based finance. statement on the importance of disclosure concerning COVID-19 related impacts. IASB * * March 27: IASB released a March 27: IASB said the release of * statement clarifying how to apply several amendments to IFRS IFRS 9 during this time of standards will be delayed until uncertainty. The Board also states May 2020, though IBOR reform that it is working with regulators work and amendments to IFRS 17 in the current environment and will proceed as planned. encourages companies to April 10: IASB is considering consider guidance provided by whether to propose a deferral by prudential and securities one year of IFRS Standards, regulators. extending ongoing consultation April 17: IASB decided to propose periods, and delaying publication an amendment to the leases of new consultations. Standard, IFRS 16, to help April 17: IASB decided to propose companies account for covid-19- extending by one year the related rent concessions, such as effective date of an amendment rent holidays. to IAS 1, extend three month of consultation period for three consultations, and defer several consultations for a year. July 15: IASB deferred by one year the effective date of Classification iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 4
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures of Liabilities as Current or Non- current within IAS1. FATF * * * April 28: FATF extended deadlines April 1: FATF released a for mutual evaluations and statement on the efforts it has follow-ups. taken in response to COVID-19. May 4: FATF released a paper on AML/CFT risks during the COVID- 19 pandemic, along with recommended policy actions, and a listing of policy measures various jurisdictions have taken in response to the theat. European March 12: ECB said banks can March 12: ECB advised it would March 20: ECB exercised flexibility March 12: EBA said EU stress- March 16: ESMA temporarily Union fully use capital buffers and that allow banks to operate regarding the classification of tests have been postponed to lowered the reporting threshold banks will benefit from relief in temporarily below the liquidity debtors as “unlikely to pay” on 2021. In 2020, the EBA will for holders of net short positions the composition of capital for coverage ratio. public guarantees granted. instead carry out an additional in shares traded on an EU Pillar 2 Requirements. Banks are July 28: ECB committed to allow March 20: ECB recommended EU-wide transparency exercise. regulated market. also expected not to increase banks to operate below the LCR that all banks avoid procyclical March 20: ESMA extended all March 19: ESMA set out an capital distributions in response until at least end-2021, without assumptions in their models to consultation deadlines for four approach to the Securities to these measures. automatically triggering determine provisions. weeks. Finance Transactions Regulation. March 27: ECB asks banks not to supervisory actions. March 25: EBA released a March 25: EBA said the deadlines March 20: ESMA clarified its pay dividends for 2019 or 2020 statement on the application of of ongoing public consultations position on call taping under until at least October 1, 2020. the prudential framework with will be extended by two months MIFID II. Banks should also refrain from regards to classification of default, and public hearings will be March 27: ESMA recommended share buy-backs aimed at forbearance, and IFRS 9. postponed. that Member State authorities remunerating shareholders. March 25: ESMA issued guidance March 31: EBA provides details on accept delayed financial reports March 31: EBA reiterated and on accounting principles, its call for leeway on reporting from issuers. expanded its call to institutions to including moratoria on repayment dates, urging one-month flexibility iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 5
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures refrain from the distribution of of loans and the calculation of for reports with remittance dates March 31: ESMA encouraged dividends or share buybacks for expected credit losses in between March and the end of national competent authorities the purpose of remunerating accordance with IFRS 9. May 2020. EBA also called for not to prioritize supervisory shareholders and assess their April 2: EBA issued guidelines on flexibility in assessing deadlines of action against execution venues remuneration policies in line with the requirements of public and institutions’ Pillar 3 disclosures. and firms in respect of the the risks stemming from the private moratoria given COVID-19. Also the EBA, in coordination with deadlines of the general best economic situation. April 22: EBA provided further the BCBS, has decided to cancel execution reports under MiFID II. April 1: SRB has published clarity on the prudential the Quantitative Impact Study March 31: EBA, in coordination commentary by its Chair which application of the definition of (QIS) based on June 2020 data. with the BCBS, has decided to acknowledges capital relief default and forbearance as well as April 6: European Commission cancel the Quantitative Impact measures undertaken by how the EBA Guidelines on extended deadlines for Study (QIS) based on June 2020 Authorities in the region and legislative and non-legislative responding to its four 2020 data. states that such measures will be moratoria on loan repayments banking and finance April 1: SRB has published taken into account in future MREL apply to securitizations. consultations. commentary by its Chair which decisions. June 19: European Parliament April 9: ESMA decided to further discusses operational relief April 8: SRB provided additional approved changes to the capital extend the response date for the measures being adopted by the clarity on its approach to requirement regulation and consultation on the MiFID II/MiFIR Board. minimum requirements for own clarified the treatment of IFRS 9 review report to June 14. April 7: ECB announced a series of funds and eligible liabilities and expected credit loss. April 9: ESMA postponed the collateral easing measures to (MREL), including the setting of September 21: EBA announced it application of the annual non- increase capacity to provide MREL targets, taking the impact would phase out certain elements equity transparency calculations funding and liquidity. of the COVID-19 crisis into of its legislative and non- and the calculations for the April 9: ESMA acknowledged that account. legislative loan moratoria that systematic internalizer test for COVID-19 has made it difficult for April 16: ECB announced it will were introduced in response to derivatives, ETCs, ETNs, emission fund managers to file certain temporarily allow lower capital COVID-19. reports and encouraged National allowances and structured finance requirements for market risk by Competent Authorities to adopt a products under MiFID II. reducing the qualitative market risk-based approach and not risk multiplier for six months. May 4: EBA, EIOPA and ESMA prioritize supervisory actions. April 22: EBA proposed to adjust published joint draft Regulatory April 9: ESMA issued a statement the capital impact for market risk Technical Standards to amend the to promote National Competent Delegated Regulation on the risk iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 6
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures by amending its standards on mitigation techniques for non- Authorities regarding the prudent valuation, including a use centrally cleared OTC derivatives timeliness of fulfilling external of 66% aggregation factor until to incorporate a one-year deferral audit requirements for interest December 31, 2020. of the two implementation rate benchmark administrators April 28: European Commission phases of the bilateral margining and contributors to interest rate proposed amendments to the requirements. benchmarks. EU's banking prudential rules, June 18: EBA extended the April 15: ECB issued a non- proposing exceptional temporary deadline for the application of its objection decision supporting measures by adapting the guidelines on payment moratoria timeline of the application of by three months to September national macroprudential international accounting 30, 2020. In addition, they authorities’ macroprudential standards on banks' capital, by highlighted that the measures taken in response to treating more favorably public implementation timeline COVID-19. guarantees granted during this envisaged in the EBA’s IRB April 15: ESMA said it supports crisis, by postponing the date of roadmap to repair internal decisions by national regulators to application of the leverage ratio models remains overall place restrictions on short selling buffer and by modifying the way unchanged. and is coordinating alignment of of excluding certain exposures the renewal process. from the calculation of the April 22: ECB adopted temporary leverage ratio. measures to mitigate the effect June 19: European Parliament on collateral availability of approved changes to the capital possible rating downgrades. requirement regulation, including the deferral of implementation of May 14: ESRB released a the leverage ratio buffer to statement with a set of January 2023. Although not recommended actions in five mentioned in the press release, priority areas in response to the draft resolution also proposes COVID-19. additional flexibility to competent May 14: ESMA expressed its authorities in relation to the support for ESRB’s proposal that iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 7
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures market risk multiplier to mitigate national regulators enhance the negative effects of the supervision of investment funds extreme market volatility. with significant exposures to July 9: EBA released a statement corporate debt and real estate. on resolution planning in May 18: ESMA noted that several light of the COVID-19 pandemic national regulators did not renew and updated its view on MREL emergency restrictions on short decisions. selling and similar transactions. July 28: ECB extended its recommendation that banks not June 2: EBA released guidelines to pay dividends until January 2021 address gaps in reporting and and issued a letter with its disclosure caused by COVID-19. expectation that banks exercise June 8: ESRB released a statement extreme moderation on variable detailing its second set of actions remuneration to conserve capital. in response to COVID-19, July 28: ECB committed to allow including a recommendation that banks to operate below the P2G distributions be restricted. and the combined buffer June 11: ESMA renewed its requirement until at least end- decision to temporarily require 2022, without automatically the holders of net short positions triggering supervisory actions. to notify the relevant national September 17: ECB announced competent authority if the that it would allow banks to position exceeds 0.1% of the exclude central bank exposures issued share capital. from the leverage ratio until June July 7: EBA released a report 27, 2021. clarifying the implementation of adjustments to the prudential framework due to COVID-19. iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 8
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures August 7: EBA provided clarity on the implementation of the reporting and disclosure framework in the context of COVID-19 measures. August 11: EBA published guidance on the impact of CRR adjustments in response to the COVID‐19 pandemic on supervisory reporting and disclosure. August 14: EBA updated its work program for 2020 in light of the COVID-19 pandemic. September 17: ESMA renewed its decision to temporarily require the holders of net short positions to notify the relevant national competent authority if their position exceeds 0.1% of the issued share capital. September 30: EBA published its work program for 2021, including work to address the effects of COVID. United States March 17: FRB, FDIC, and OCC March 17: FRB, FDIC, and OCC March 19: The FDIC Chairman March 24: FRB stated that it will March 24: FRB announces encouraged banks to use their encouraged banks to use their asked FASB to delay transitions to grant firms additional time to adjustments to its supervisory capital buffers and issued an liquidity buffers. certain accounting rules including resolve non-critical existing approach with increased iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 9
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures interim final rule to introduce a April 23: FRB announced those related to CECL and TDR supervisory findings, but CCAR monitoring and outreach and technical change to make any temporary measures to help classifications. capital plans should still be reduced examination activities, automatic limitations on capital increase the availability of March 22: FRB, CSBS, CFPB, FDIC, submitted by April 6. especially for small financial distributions more gradual. intraday credit by suspending NCUA, and OCC announced they March 31: FRB said it would delay institutions. March 23: FRB issued an interim uncollateralized intraday credit will not direct institutions to the effective date for its revised March 24: FRB delayed the final rule to introduce a technical limits and permitting a automatically categorize loan control framework by six months. implementation of changes to change to make any automatic modifications as troubled debt April 2: FRB, FDIC, OCC, SEC, and procedures governing the streamlined procedure for limitations on capital distributions restructurings. CFTC said they would consider provision of intraday credit to U.S. secondary credit institutions to under the TLAC rule more March 27: FRB, FDIC, and OCC comments on their proposal to branches and agencies of foreign request collateralized intraday announced an interim final rule update the Volcker Rule’s covered banking organizations by six gradual. credit. March 27: FRB, FDIC, and OCC that would provide flexibility to funds provision until May 1, a months. May 5: FRB, FDIC, and OCC allow banks to mitigate the month later than originally March 25: SEC has extended said they would allow early announced an interim final rule to effects of CECL. announced. certain reporting deadlines for adoption of SA-CCR. April 1: FRB announced a adjust the Liquidity Coverage April 7: SEC said that financial April 10: CFTC announced it public companies and issued temporary change to its Ratio for banks participating in institutions that take advantage of would extend deadlines for guidance on COVID-19 related the Money Market Mutual Fund the CARES Act provision that certain open consultations. disclosures. supplementary leverage ratio Liquidity Facility and the Paycheck allows the deferral of April 27: FRB and FDIC announced March 31: CFTC has issued no- rule, which would exclude U.S. Protection Program Liquidity implementation of two GAAP that they would extend the action relief to foreign affiliates of Treasury securities and deposits standards will not be in violation certain futures commission Facility. comment period for their at Federal Reserve Banks from the of GAAP. merchants affected by COVID-19, proposed guidance for large calculation of the rule for holding April 22: OCC, FRB, and FDIC which will last until September 30. foreign banks’ resolution plans by companies until March 31, 2021. announced a final rule with April 8: SEC issued a statement on 30 days. April 6: FRB, FDIC, and OCC changes to the interim final rule the importance of robust May 6: FRB and FDIC extended announced two interim final rules of March 27 on CECL disclosures and reporting during for community banks, including a the deadlines for two resolution implementation. COVID-19. change to the community bank plan requirements. April 14: FRB, FDIC, OCC, NUCA, leverage ratio. May 28: CFTC approved an and CFPB issued an interim final April 7: FRB, OCC, FDIC, CFPB and interim final rule to grant an rule to temporarily defer real NCUA issued a revised extension of the compliance estate-related appraisals and interagency statement on loan schedule for initial margin evaluations and related reporting iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 10
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures modifications. The statement requirements for uncleared swaps requirements under the agencies' includes supervisory in response to COVID-19. interagency appraisal regulations. interpretations on past due and June 10: CFTC extended elements June 15: FRB announced that it nonaccrual regulatory reporting of its COVID-19 no-action relief will resume examination activities of loan modification programs through September 30, 2020. for all banks, after previously and regulatory capital. announcing a reduced focus on April 9: FRB, FDIC, and OCC exam activity in light of COVID-19. announced an interim final rule to June 23: FRB, FDIC, OCC, NCUA, encourage lending through the and state regulators issued Small Business Administration's guidance to examiners to Paycheck Protection Program promote consistency and (PPP), clarifying that a zero flexibility in oversight of financial percent risk weight applies to institutions affected by COVID-19. loans covered by the PPP for capital purposes. April 30: FRB clarified that the interest in a Main Street loan retained by an Eligible Lender should be assigned the risk weight applicable to the counterparty for the loan in a FAQ. May 15: FRB, FDIC, and OCC announced an interim final rule permitting depository institutions to choose to exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the supplementary leverage ratio. iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 11
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures June 25: FRB decided to suspend share repurchases and restrict dividends for the third quarter of 2020. September 29: FRB finalized a rule to neutralize the regulatory capital and liquidity effects for banks that participate in certain Fed liquidity facilities. Argentina * * March 19: Central Bank of the * * Argentine Republic arranged for the provisional flexibility of the parameters with which bank debtors are classified. Australia March 19: APRA announced March 30: APRA allows March 23: APRA provided March 23: APRA said it is April 1: APRA announced changes support for use of capital buffers authorized deposit-taking flexibility for treatment of suspending all prudential to reporting obligations in to promote ongoing lending to institutions to include the benefit payment holidays and framework consultations and response to COVID-19. the economy. of the Initial Allowance in the reorganized loan repayments that actions on all non-essential April 1: APRA and ASIC release a April 7: APRA released a calculation of the Liquidity such arrangements are not matters until at least September letter on the impact of COVID-19 statement that it expects ADIs Coverage Ratio, Minimum treated as in arrears or 30, 2020. The implementation for superannuation trustees. and insurers to limit discretionary Liquidity Holdings Ratio and Net restructured. dates for recently finalized rules April 8: APRA will suspend issuing capital distributions, including Stable Funding Ratio from 31 July 8: APRA announced an will be reconsidered. new banking or insurance licenses dividends. The statement includes March 2020. extension of its temporary capital March 23: ASIC has immediately for at least six months. guidance for determining treatment for bank loans with suspended a number of near-term April 8: ASIC released feedback on distributions. APRA also expects repayment deferrals, as well as activities which are not time- financial institutions' preparation that Boards will appropriately temporarily adjusting the capital critical, including consultation and for LIBOR transition recognizing limit executive cash bonuses. treatment of restructured loans. reviews. that disruptions from the COVID- May 7: APRA released an FAQ on September 9: APRA issued a letter March 30: APRA announced it is 19 outbreak may affect the timing its expectations for the regulatory outlining its response to its deferring its scheduled iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 12
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures capital approach for loan consultation on capital measures implementation of the Basel III of some aspects of institutions’ repayment deferrals and and reporting requirements for reforms in Australia by one year. transition plans. clarifications on its guidance for loans impacted by COVID-19. April 16: APRA announced new April 14: ASIC released a mortgage lending. commencement dates for statement detailing how its May 19: APRA published an FAQ prudential and reporting regulatory work and priorities on market risk capital standards. have changed in response to requirements in response to August 10: APRA announced it COVID-19. COVID-19. will recommence public August 31: APRA has published its June 17: APRA updated its FAQ to consultations on select policy 2020-2024 Corporate Plan, which provide clarification on the reforms and begin a phased has been updated to account for standardized approach to credit resumption of the issuing of new the substantial impact of the risk-weighted assets. licenses. COVID-19 pandemic. July 29: APRA updated its capital management guidance for banks and insurers, easing restrictions around paying dividends. August 13: APRA issued a consultation letter to banks regarding capital measures and reporting requirements for loans affected by COVID-19. Belgium March 11: National Bank of * April 15: National Bank of Belgium * March 13: National Bank of Belgium lowered the counter- released a Q&A for credit Belgium wrote to its banks cyclical buffer level from 0.5% to institutions on the moratorium welcoming the measures of 0% to support banks in extending and guarantee scheme including EBA/ECB and stating its intention credit facilities to customers. prudential and accounting to apply them in full. April 1: National Bank of Belgium implications. March 17: FSMA announces expects banks to comply with ECB prohibition of short selling. recommendation regarding April 2: FSMA announced an dividend distribution policy in the explanation regarding recording iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 13
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures context of the management of the of telephone conversation under coronavirus. MiFID II. June 30: National Bank of Belgium April 14: National Bank of Belgium said it would keep the announced an extension for countercyclical capital buffer at certain reporting requirements in 0% in Q3. accordance with EU-level July 30: National Bank of Belgium changes. extended its recommendation to April 15: FSMA extended the suspend dividend payments until prohibition of short selling until at least January 1, 2021 and May 18. encouraged a cautious attitude May 18: FSMA suspended the ban towards variable remuneration on creating or increasing net short and profit sharing. positions as of May 19. September 30: National Bank of Belgium kept the countercyclical capital buffer at 0% and maintained its expectation not to increase at least until Q3 2021. Brazil March 16: Banco Central do Brasil Late February: Banco Central do March 16: Banco Central do Brasil April 20: Banco Central do Brasil * reduced the Conservation Capital Brasil reduced the reserve reduced provisioning rules for the postponed the deadline of Pillar 3 Buffer from 2.5% to 1.25% for one requirement ratio on time refinancing of certain loans for six reporting to June 30. year. deposits and increased the months. amount of reserves considered High Quality Liquid Assets. Canada March 13: OSFI lowered the March 27: OSFI announced March 27: OSFI announced March 13: OSFI said that no buffer April 3: OSFI released a statement Domestic Stability Buffer flexibility adjustments to the LCR transitional arrangements for increases would happen for at detailing the steps it has taken to requirement from 2.25% of RWA and NSFR frameworks and expected loss provisioning and least 18 months. support the resilience of financial to 1% of RWA. encouraged banks to utilize provided guidance to the institutions. liquidity pools. application of IFRS9. They also April 9: OSFI announced iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 14
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures March 13: OSFI set out an stated that loans subject to March 13: OSFI said that it will extensions of several regulatory expectation that dividend payment deferral arrangements suspend all consultations and new filings. increases and share buybacks will not be deemed as non- policy development. April 16: OSFI released a should be paused. performing. March 27: OSFI acknowledged comprehensive FAQ to explain the March 27: OSFI encouraged banks April 9: OSFI expressed their view and adopted the revised BCBS policy responses it has taken in to use leverage ratio buffers and that a maximum add-back of 70% timetable for Basel III regard to COVID-19. announced transitional of allowances to Common Equity implementation. Further they June 8: OSFI further extended arrangements for capital Tier 1 capital is appropriate for announced that the 2020 regulatory return treatment of expected loss ECL accounting. implementation date for FRTB implementation deadlines. provisioning. August 31: OSFI will gradually and CVA will be delayed until August 6: OSFI published a March 30: OSFI determines phase out the special capital January 2024. newsletter including plans to capital treatment of loans to treatment of loan deferrals that April 9: OSFI extended the restart policy development and SMEs under programs to support was provided to banks at the start deadline for the implementation consultations with the financial COVID-19 efforts. of the pandemic. of the final two phases of the sector. April 9: OSFI temporarily excluded initial margin requirements for central bank reserves and HQLA non-centrally cleared derivatives sovereign-issued securities from by one year. the leverage ratio exposure measure. April 9: OSFI is lowering the capital floor factor from 75% to 70% until the domestic implementation of the Basel III capital floor expected in Q1 2023. April 17: OSFI has released a COVID-19-related explanatory memo on Basel III and bank capital, buffer utilization, and related dividend restrictions. iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 15
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures May 1: OSFI issued a letter stating expectations on the use of Pillar II capital buffers for DTIs using the Standardized Approach to credit risk. June 23: OSFI announced that the Domestic Stability Buffer will remain at 1% of total risk- weighted assets. July 15: OSFI released a statement supporting the recent statements issued by the BCBS and the FSB reinforcing the usability of banks' capital buffers. China * April 3: PBOC will cut the required * * * reserve ratio for small and medium banks by 1% with reductions of 0.5% on both April 15 and May 15. April 7: PBOC released an FAQ on targeted reserve ratio requirement cuts. Finland March 16: FIN-FSA confirmed that March 16: FIN-FSA confirmed that April 6: FIN-FSA announced that it March 24: FIN-FSA extended time June 25: FIN-FSA confirmed that banks are temporarily exempt banks are temporarily exempt will comply with EBA standards on for reporting by non-life and life only parts of the EBA Guidelines from fulfilling certain additional from fulfilling certain additional legislative and non-legislative insurance companies. published June 2 on additional capital requirements. liquidity requirements. moratoria on loan repayments. June 29: FIN-FSA will comply with reporting and disclosure March 17: FIN-FSA lowered bank May 7: FIN-FSA clarified that the EBA’s extension of payment requirements in the context of capital requirements by 1% by adoption of a transitional COVID-19 will be mandatory. iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 16
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures removing the systemic risk buffer provision under the CRR may be moratoria deadlines to September July 3: FIN-FSA said that in line and adjusting bank-specific used to mitigate the impact of 30. with an earlier ESMA decision, the requirements of all credit expected credit-loss provisioning net short position reporting institutions. under IFRS 9 on CET1. threshold remains at 0.1%. March 17: FIN-FSA will closely August 20: FIN-FSA announced it monitor that banks use the has applied the updated EBA positive effects of measures to guidelines on legislative and non- mitigate the impact of the crisis legislative moratoria on loan and not to channel them into the payment of dividends or repayments. performance bonuses. March 30: FIN-FSA issued a recommendation to supervised banks to refrain from dividend distributions until October 1. April 6: FIN-FSA decided to remove the additional capital requirement of the systemic risk buffer for certain banks in addition to other systemically important institutions. June 29: FIN-FSA decided to maintain the countercyclical capital buffer rate at 0.0% and relaxed the residential mortgage loan cap. July 29: FIN-FSA extended the validity of its profit distribution recommendation that credit iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 17
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures institutions under its supervision do not pay or commit to pay dividends or other profit distributions until January 1, 2021. The recommendation also applies to repurchases and redemptions of shares. September 30: FIN-FSA decided to maintain the countercyclical capital buffer rate at 0% and kept the loan caps unchanged. France March 18: French authorities to * April 7: AMF clarified accounting * March 17: AMF announced a reduce the countercyclical capital standards for calculation of short selling ban for one month. buffer from 0.25% RWA to 0% expected credit losses in light of April 8: AMF has published a RWA in accordance with the ECB recent announcements from statement clarifying appropriate proposal. ESMA, EBA, and IASB. fund and risk management March 30: ACPR called on credit protocols for asset managers institutions under its direct during the COVID-19 crisis. supervision and finance April 9: ACPR announces a companies to refrain from relaxation of the reporting distributing dividends or conditions for the banking sector. undertaking buybacks until at April 15: AMF announced the least October 1. extension of the net short April 1: High Council for Financial position ban until May 18, 2020 Stability lowered the and issued an FAQ to clarify countercyclical capital buffer to details of the ban. 0% as of 2 April. iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 18
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures July 28: ACPR called on financial May 18: AMF suspended the ban institutions to follow the ESRB’s on the creation or increase of net recommendations on short positions. distributions of dividends, variable compensation, and share buybacks. Germany March 18: Deutsche Bundesbank March 20: BaFin announced in its March 27: BaFin and Deutsche April 2: BaFin and Deutsche March 19: BaFin clarified the announced that BaFin intends to FAQs that liquidity buffers can be Bundesbank shared the view that Bundesbank postponed the stress scope of prohibitions on short- lower the countercyclical capital used without any approval of the the current situation does not test for less-significant institutions selling. buffer from 0.25% to 0% as of supervisors in the current stress lead to an undifferentiated, planned for 2021 to 2022. April 1. situation as foreseen in the automatic transfer of financial March 24: BaFin recommends regulation. instruments from Level 1 to Level firms pause share buybacks and 2 or Stage 3. carefully consider dividends and bonuses. March 30: BaFin confirmed that they expect banks to not pay any dividends or distribute profits until at least October 2020. March 31: BaFin issued a general order to reduce the quota for domestic countercyclical capital buffer from 0.25 percent to 0 percent as of April 1. August 4: BaFin reiterated its position on dividend payments. September 21: BaFin will let less significant institutions under its supervision exclude certain iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 19
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures exposures to central banks from the leverage ratio. Hong Kong March 16: HKMA lowered the April 3: HKMA announced March 30: HKMA announced that March 30: HKMA said it would April 7: HKMA issued a letter on counter-cyclical buffer level from measures to increase the banking it is in discussions with relevant defer Basel III implementation in AML/CFT measures during COVID- 2.0% to 1.0% to support banks in sector’s liquidity and encouraged bodies about the application of line with BCBS’s updates. 19. extending credit facilities to banks to use their liquidity buffers expected credit loss provisioning March 31: SFC said it is extending April 21: SFC released a statement customers. even if their LCRs fall below the requirements and expects to the implementation deadlines of on its commitment to providing July 7: HKMA announced that the requirement. make a further announcement certain intermediary regulations. regulatory relief during COVID-19. countercyclical capital buffer April 3: HKMA said the current soon. May 7: SFC will postpone the April 22: HKMA decided to remains unchanged at 1.0%. level of regulatory reserves will be April 8: HKMA decided to lower implementation of initial margin postpone the 2020 Supervisor- reduced by half. the regulatory reserve requirements for non-centrally Driven Stress Test until 2021. requirement used for provisioning cleared over-the-counter by 50% with immediate effect. derivative transactions by one May 25: HKMA clarified its year, in line with IOSCO and BCBS. expectation on treatment of May 25: HKMA will defer the final expected credit loss provisioning. two implementation phases of margin requirements for non- centrally cleared OTC derivatives by an additional year until 1 September 2022. India March 27: Reserve Bank of India March 27: Reserve Bank of India April 17: Reserve Bank of India April 17: Reserve Bank of India March 20: SEBI announced decided to maintain current decided to defer the permitted to grant a moratorium outlined detailed instructions regulatory measures including minimum capital conservation implementation of the Net Stable of three months on payment of all relating to extension of resolution position limits on stocks and ratios until September 30 with the Funding Ratio to October 1. term loan instalments falling due timelines. derivatives. last tranche of the capital April 17: Reserve Bank of India between March 1 and May 31 and May 23: Reserve Bank of India April 20: SEBI decided that the conservation buffer delayed to announced to reduce Statutory clarified to exclude from the further extended timelines for measures implemented since September 30. The pre-specified Liquidity Ratio (SLR) by 18% and number of days past-due for the resolution review. March 23, 2020 will continue to trigger for loss absorption through increase Marginal Standing purpose of asset classification. be in force till May 28, 2020. conversion/write-down of Facility to 3%, permit SLR-eligible iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 20
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures Additional Tier 1 instruments will assets to be recognized as HQLA, They also issued guidance on April 29: Reserve Bank of India remain at 5.5% of RWA until and allow banks to operate under provisioning. provided a list of regulatory September 30. 100% Liquidity Coverage Ratio for May 23: Reserve Bank of India returns which can be submitted April 1: Reserve Bank of India said certain period. extended the moratorium on with a delay of a maximum of 30 it will not activate the September 29: Reserve Bank of payment of term loans by another days from the due date. countercyclical capital buffer. India decided to defer the three months. May 22: SEBI announced it would April 17: Reserve Bank of India implementation of NSFR August 6: Reserve Bank of India extend the regulatory measures decided that all banks shall not guidelines until April 1, 2021. confirmed asset classifications implemented on March 23, 2020 make any further dividend and provisioning under the until June 25, 2020. payouts from the profits Resolution Framework for COVID- June 18: SEBI announced it would pertaining to the financial year 19-related Stress. extend the regulatory measures ended March 31, 2020 until announced on March 20, 2020 to further instructions. July 30, 2020. June 21: Reserve Bank of India July 21: SEBI announced it would assigned 0% risk weights to the extend the regulatory measures Guaranteed Emergency Credit announced on March 20, 2020 to Line under the Emergency Credit August 27, 2020. Line Guarantee Scheme. September 29: Reserve Bank of India decided to defer the implementation of the last tranche of 0.625% of the Capital Conservation Buffer from September 30, 2020 to April 1, 2021. Indonesia May 28: OJK announced Credit April 14: Bank Indonesia raised April 16: OJK issued guidelines for March 23: OJK extended the March 23: OJK prohibits short Treatment / Restructuring the Macroprudential Liquidity accounting treatment, especially submission deadlines for certain selling transactions from March 2 Financing in accordance with POJK Buffer by 200 basis points for in the application of Financial reports by two months. until at a specified date Stimulus is excluded from the Instruments and Fair Value March 31: Bank Indonesia relaxed determined by the OJK. Measurement. mandatory reporting for iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 21
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures calculation of low-quality assets conventional commercial banks, commercial banks and all other or Loans at Risk (LAR). beginning May 1. parties effective from 31st March May 28: OJK temporarily removed May 28: OJK temporarily relaxed 2020 until a date yet to be the obligation to fulfill the 2.5% obligations to fulfill Liquidity determined. Capital Conservation Buffer for Coverage Ratio (LCR) and Net May 28: OJK postponed the certain banks until March 31, Stable Funding Ratio (NSFR) for implementation of Basel III 2021. Reforms to January 1, 2023. certain banks as low as 85% by March 31, 2021. Banks are required to prepare action plans to return the fulfillment of LCR and NSFR to 100% no later than 30 April 2021. Italy March 20: Banca d’Italia March 20: Banca d’Italia * * March 17: CONSOB prohibited confirmed all banks and non-bank confirmed all banks and non-bank short selling on the entire Stock intermediaries are allowed to intermediaries are allowed to Exchange list. operate temporarily below the operate temporarily below the March 20: Banca d’Italia extended level of the Pillar 2 Guidance and liquidity coverage ratio. deadlines of reporting obligations. the capital conservation buffer. April 15: CONSOB further March 27: Banca d’Italia suspended all regulation related recommended that, at least until to COVID until May 11, 2020. October 1, all banks and banking April 22: Banca d’Italia issued a groups under its supervision will number of updates on supervisory not pay out any dividends and will reporting obligations. not take on any irrevocable May 18: CONSOB suspended the commitments regarding the ban on creating net short payment of dividends for the positions or increasing existing financial years 2019 and 2020; net short positions. and will refrain from carrying out iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 22
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures share buy-backs aimed at remunerating shareholders. March 27: Banca d’Italia has maintained the countercyclical buffer rate at 0% for Q2 of 2020. July 26: Banca d’Italia will keep the countercyclical buffer rate at 0% for Q3 of 2020. July 28: Banca d’Italia updated its dividend restrictions and buffer policies to be in line with the ECB’s recommendations. Japan March 17: JFSA confirmed banks March 17: JFSA confirmed a * March 30: JFSA announced the March 30: JFSA confirmed a can use capital buffers when flexible approach to banks consideration of deferral of its flexible approach to banks filing necessary to maintain lending breaching the liquidity coverage Basel III implementations deadline. volume. ratio. schedule, in line with BCBS’s August 31: JFSA published a March 17: JFSA confirmed that recent update. Also confirmed summary of its priorities for July certain rescue lending activity that Net stable funding ratio will 2020-June 2021 in light of COVID- would be risk-weighted at 0%. not be implemented for at least a 19. April 8: JFSA and BOJ have agreed year. to develop measures to April 14: JFSA will extend deadline temporarily exclude central bank for contracts for Settlement Agent deposits from the leverage ratio for Bank’s Electronic Settlement exposure measure. System until the end of April 17: JFSA proposed to September if they have shown remove central bank reserve from their will to settle contract by end the calculation of leverage ratio of May. and maintain the current ratio. April 15: JFSA said companies can defer annual meetings in relation to the recent announcement of iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 23
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures the revision of the Cabinet Office Order on Disclosure of Corporate Affairs which will extend the filing deadline of annual and quarterly securities reports, etc. to the end of September. April 15: JFSA proposed to defer the implementation of the final two phases of the margin requirements for non-centrally cleared derivatives. Mexico March 31: CNBV issued April 8: CNBV relaxed certain March 25: CNBV issued special March 26: CNBV suspended * recommendations for banking liquidity rules, by deciding that accounting criteria, applicable to hearings and procedures during institutions to refrain from banks can register as liquid assets institutions of credit. The support March 23 to April 19. agreeing to the payment of those that had been eligible for will consist of the partial or total April 8: CNBV announced a delay dividends, share repurchases, or the Liquidity Coverage Ratio (LCR) deferral of capital and/or interest in the implementation of any other mechanism tending to until February 28 and will also payments for up to 4 months. regulatory standards including reward shareholders. grant some exceptions for April 8: CNBV said it will delay the Business Indicator Method and April 8: CNBV will grant corrective measures if a bank’s implementation of IFRS9 to TLAC requirements. temporary regulatory flexibility LCR falls below 100%. January 1, 2022. April 8: CNBV announced that it until March 31, 2021 so that September 23: CNBV extended April 15: CNBV issued will extend certain reporting banks can use their capital liquidity requirements until March adjustments to the special deadlines. buffers. 2021, with which banks will be accounting criteria and extended September 23: CNBV extended able to temporarily reduce their the target of its treatment for flexibility on the use of the capital liquidity buffers below 100%. credit institutions. buffer until December 31, 2021. April 27: CNBV issued special accounting criteria and information on loan modifications for savings and credit institutions. iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 24
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures September 23: CNBV announced a new package of measures for credit restructuring. Netherlands March 17: DNB said that systemic March 20: DNB allowed banks to April 24: DNB guided banks to March 17: DNB announced that March 16: AFM concurs with the buffers will be lowered from 3% temporarily operate below the avoid excessively procyclical the introduction of a floor for ESMA decision to temporarily of global risk-weighted exposures liquidity coverage ratio. assumptions in their expected mortgage loan risk weighting will requiring the holders of net short to 2.5% for ING, 2% for Rabobank credit loss (ECL) estimations be postponed. positions to notify the relevant and 1.5% for ABN Amro. during the COVID-19 pandemic national competent authority. March 17: DNB emphasized that March 27: AFM announced it banks use freed-up capital to would exercise forbearance for support lending, and not to pay delayed financial reports, in dividend or share repurchases. accordance with ESMA March 20: DNB allowed banks to recommendations. temporarily operate below the April 16: DNB extended level of capital as defined by the submission deadlines for certain Pillar 2 Guidance and the capital supervisory reporting. conservation buffer. March 20: DNB stated that Pillar 2 Requirements can partially be met by capital instruments that do not qualify as Common Equity Tier 1 capital. March 23: DNB deferred extra capital requirement for mortgage loans until further notice. May 12: DNB clarified treatment for real estate valuation and capital requirements. May 27: DNB extended temporary relief measure for internal model iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 25
Provisioning, Definition of Consultations/ Other (reporting, stress Jurisdiction Capital Liquidity Default and NPL-related Implementation Timetables testing, conduct, etc.) measures capital requirements for market risk. June 19: DNB has decided to leave the CCyB unchanged at 0%. July 6: DNB supported the ESRB’s recommendation that investment firms limit distributions. July 28: DNB extended its call for banks to refrain from paying dividends and buying back own shares in accordance with ECB’s announcement. September 17: DNB said it will give leverage ratio flexibility to smaller banks under its supervision, in line with the ECB. September 25: DNB left the CCyB unchanged at 0%. Norway March 13: Ministry of Finance March 13: Finanstilsynet April 3: Finanstilsynet provided June 15: Finanstilsynet March 13: Finanstilsynet lowered the countercyclical confirmed companies can use the guidance on treatment of IFRS9. postponed the implementation of announced postponement of capital buffer level from 2.5% to liquidity reserve to cover liquidity April 3: Finanstilsynet explained SREP to 2021 and decided not to certain reporting deadlines. 1.0% to support banks in output in a stress situation. the EBA guideline on non- make new Pillar 2 decisions in the June 11: Finanstilsynet decided to extending credit facilities to performing loans and clarified second half of 2020. extend the lower threshold for customers. that though no moratoriums are reporting net short positions March 13: Norges Bank said that (0.1%) for three months in in Norway, the guideline can be when banks’ general meetings accordance with ESMA. applied to companies operating in decide on dividend payments, June 23: Finanstilsynet decided they should in the period ahead countries with moratoriums. not to implement the EBA take account of the extraordinary April 20: Finanstilsynet specified guideline on reporting published situation now facing. how the capital requirement on June 2. iif.com © Copyright 2020. The Institute of International Finance, Inc. All rights reserved. Page 26
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