Policy measures in response to the COVID-19 pandemic
COVID-19 policy measures
This spreadsheet provides information on the policy measures taken by Member States, EU institutions and national authorities in response to the coronavirus (COVID-19) pandemic. It is updated on a regular basis.
This information is collected in cooperation with the European Central Bank, the European Commission, the European Supervisory Authorities and national authorities.
Disclaimer: The information on this page is provided by the ESRB Members and should be used for information purposes only. It was last updated on 29 September 2022. Please see the disclaimer & copyright page for further details.
1. Implications for the financial system of guarantee schemes and other fiscal measures to protect the real economy
National and EU authorities have swiftly taken decisive measures to support the liquidity and solvency of firms and protect households’ income during the coronavirus (COVID-19) pandemic. A dialogue between macroprudential authorities and fiscal authorities is of utmost importance to assess the implications for financial stability, including cross-border and cross-sector aspects.
- Note on monitoring the financial stability implications of COVID-19 support measures
- Financial stability implications of support measures to protect the real economy from the COVID-19 pandemic
- Recommendation of the European Systemic Risk Board on monitoring the financial stability implications of debt moratoria, and public guarantee schemes and other measures of a fiscal nature taken to protect the real economy in response to the COVID-19 pandemic (ESRB/2020/8)
- Template 1 - Reporting templates under Recommendation B of Recommendation ESRB/2020/8
- Template 2 - Reporting templates under Recommendation B of Recommendation ESRB/2020/8
- Template 3 - Reporting templates under Recommendation B of Recommendation ESRB/2020/8
- Compliance assessment template of Recommendation A and B ESRB/2020/08 (Word document)
- ESRB letter to Governments on the financial stability impact of the national guarantee schemes and other fiscal measures
2. Market illiquidity and implications for asset managers and insurers
The sharp fall in asset prices observed at the onset of the coronavirus pandemic was accompanied by significant redemptions from some investment funds and a deterioration of financial market liquidity. If used in a timely manner, liquidity management tools may in particular help those funds that invest in less-liquid assets or assets that become temporarily illiquid and have short redemption periods.
- EIOPA public statement
- ESRB letter to EIOPA on liquidity risks in the insurance sector
- Recommendation of the European Systemic Risk Board on liquidity risks in investment funds (ESRB/2020/4)
- ESMA Public Statement
- ESRB Public Statement on the use of liquidity management tools by investment funds
3. Impact of large scale downgrades of corporate bonds on markets and entities across the financial system
The corporate bond sector has been impacted by the weak economic outlook due to the coronavirus pandemic. For this reason, the ESRB is assessing the impact of a common scenario of large-scale ratings downgrades across the financial sector. As part of this assessment, a simulation study was carried out to evaluate possible repercussions from large-scale corporate bond downgrades and potential fire sale impacts under a range of hypothetical scenarios and assumptions. This study has been summarised in a technical note.
- Issues note on liquidity in the corporate bond and commercial paper markets, the procyclical impact of downgrades and implications for asset managers and insurers
- A system-wide scenario analysis of large-scale corporate bond downgrades
- Letter to European Commission and ESMA on procyclical impact of downgrades of corporate bonds on markets and entities across the financial system
- References to external ratings or credit rating agencies in EU law
4. System-wide restraints on dividend payments, share buybacks and other pay-outs
A number of ESRB member countries and institutions at the European level have encouraged banks and insurance corporations in the European Union to limit voluntary pay-outs (e.g. dividends, bonuses or share buybacks aimed at remunerating shareholders). Where enforced, these measures help to remove potential stigma attached to financial institutions choosing to preserve their capital resources in these critical times, enhance the resilience of the financial sector, strengthen its capacity to lend to the real economy in a crisis situation and reduce the risk of failure of financial institutions.
- Recommendation of the European Systemic Risk Board on restriction of distributions during the COVID-19 pandemic (ESRB/2020/7)
- Compliance assessment template of Recommendation ESRB/2020/7 (Word document)
- Report on system-wide restraints on dividend payments, share buybacks and other pay-outs
- Bank of England and Prudential Regulation Authority public statement
5. Liquidity risks arising from margin calls
The coronavirus pandemic and the recent oil market disruptions have caused a sharp drop in asset prices and increased volatility, resulting in significant margin calls across centrally cleared and non-centrally cleared over-the-counter derivative markets. The ESRB member institutions have been exchanging views on the possible adverse liquidity impact on both bank and non-bank entities, including in view of high degrees of market concentration and interconnectedness.