“An impact of COVID-19 on business is already felt, but at this stage it is very difficult to predict its real size and the effect on each country’s financial sector. However, the approach taken by Europe and Latvia in applying the regulatory requirements has provided the banks with adequate capital and liquidity reserves which will serve as a safety cushion in such situations. In addition, the FCMC will ensure an individual and flexible supervisory approach for financial and capital market participants to mitigate the adverse effects of COVID-19 on the financial sector,” FCMC Chairwoman Santa Purgaile points out.
The FCMC is in close contact with the ECB, the European Banking Authority, the European Securities and Markets Authority, European Insurance and Occupational Pensions Authority (EIOPA) and The European Systemic Risk Board (ESRB), as well as other national supervisory authorities and institutions, to ensure the assessment of the situation and planning the necessary preventive or emergency measures in order to mitigate the impact of COVID-19 on the functioning of financial market participants.
The ECB announced a number of measures to ensure that its directly supervised banks can continue to fulfil their role in funding the real economy as the economic effects of COVID-19 become apparent.
European Central Bank’s press release.
The European Banking Authority has notified on actions to mitigate the impact of COVID-19 on the European Union (EU) banking sector, including postponing the EU-wide stress test to 2021 and calling on the relevant competent authorities of the EU member states to make full use of flexibility embedded in existing regulation.
European Banking Authority’s statement.
The European Securities and Markets Authority (ESMA) has also announced that together with national competent authorities (NCAs), it is closely monitoring the situation in view of the continuing impact of the COVID-19 outbreak on financial markets in the EU and makes recommendation to the financial market participants.
The European Securities and Markets Authority’s announcement.
FCMC Communications Division
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