by Lieve Lowet

We live in exceptional times. Right now it is good to check whether the measures announced at high speed comply with the basic principles of correct decision-making and that they are in accordance with the applicable laws and regulations. I have made an in-depth analysis and would like to share my findings in a series of three articles. The articles will be published on three consecutive days. On 17 January 2020, in tempore non suspectu, the ECB issued a recommendation on dividend distribution policies to prepare banks for the introduction of IFRS9 and the new CRD / CRR requirements (ECB / 2020/1, OJ C30 29 January 2020). Banks, even those with “fully loaded” ratios, were recommended to distribute their net profits in dividends in a conservative manner. And then the corona crisis started to hit….
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by Sandra Galletti & Dr. Steven Goldman

This article identifies some strategies and recommendations that banks can utilize to minimize the impact on bank operations of the Covid-19 pandemic. A pandemic* (1) is a very particular and very terrible type of crisis. Unlike other crises such as earthquakes or cyberattacks which impact the bank’s infrastructure, pandemics directly impact its people – employees, vendors, suppliers – who might be unable to perform their jobs. Furthermore, customers cannot do business in usual ways. Unlike other crises such as technological breakdowns or security threats to which there is a reasonable expectation of resolution within a certain time frame, a pandemic’s duration can be prolonged; its severity brutal. Continue reading…

by Muel Kaptein

In times of crisis, we have high expectations of our business leaders. We want our business leaders to take their responsibility, make decisions and resolve dilemmas. At such times, the main quality business leaders must possess is a willingness to get their hands dirty, because they will be asked to make decisions that will harm people, no matter what they decide. Experts have listed in the media many qualities business leaders should display in these times of crisis. Now more than ever, business leaders must have faith in their employees who are working from home, show empathy and be humble, focused and self-confident. Other experts tell us that business leaders should now be purpose driven, accountable and long-term oriented. It is true that all these qualities are relevant, but they would seem to suggest that being a leader in these times mainly requires one to focus on slightly different things than usual. After all, aren’t all the aforementioned qualities vital in normal times, too? If we wish to steer our business leaders in the right direction, we must do justice to the situation in which they currently find themselves, i.e. a crisis.
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It is clear that one of the most severely affected sectors is the global aviation sector. How will this go and how far will the government’s financial aid go to keep the strategically important airlines figuratively and literally in the air? Not to mention the measures that are likely to come our way. A valid passport and a paid flight ticket will no longer be a guarantee that you can get on board a flight. And will half of the passenger seats disappear to the cargo hold soon? Food for thought for trend watchers, doomsday prophets and economists, but for now the hard reality is that about 90 percent of the fleet of many airlines is parked neatly on the ground. We will go through the situation with you of any airline we know, KLM, but what is mentioned below may apply to any other airline. Continue reading…

Prior to the outbreak of the COVID-19 virus, large active banks operating on an international scale made more progress towards satisfying the Basel III capital requirements. Their liquidity ratios remained stable in comparison to the ratios reported in the end of 2018, but there is a need to increase the operational capacity of banks and supervisors to adequately respond to the pandemic. The Basel Committee has made a decision to not collect Basel III monitoring data for the end June 2020 reporting date set. Continue reading…

Michel Klompmaker

The US-based insurer Lemonade is now entering the Dutch market. This so-called “disrupter” within the insurance market does it just that little bit different than the traditional insurers. This new player simply reserves a fixed amount for costs and profits. The rest of the premium money goes to the payment of claims and what remains afterwards is donated to charities policyholders choose. Not for nothing is the company the only insurer in the Benelux with an international B-Corp label. The company is driven by social impact and bases its models on behavioral economics and artificial intelligence. We recently spoke to Daniel Schreiber – CEO of Lemonade, whose European headquarters is in Amsterdam.  Continue reading…

It is now about ten years ago that Greece received a loan of 110 billion euros from the European countries (with the exception of Slovakia) and the IMF. Europe signed for EUR 80 billion and the IMF for EUR 30 billion, but under strict conditions. All this was due to the enormous anger in 2009 when it appeared that the Greek government, in particular the Ministry of Finance, had systematically published far too rosy figures for the budget deficit. The situation has improved in 2020, and the Greek government can once again operate independently on the capital market, but the ordinary Greek is still experiencing the consequences of the interventions of the imposed measures. The question nowadays, of course, is how the consequences of the current corona crisis relate to the agreements made. Read, therefore, the interview with Isabel Schnabel, Board Member of the ECB. The interview was conducted by Mr Angelos Athanaspoulos and appeared in the Greek daily newspaper, To Vima on April 4.

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The Basel Committee’s oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), has endorsed a set of measures to provide additional operational capacity for banks and supervisors to respond to the immediate financial stability priorities resulting from the impact of the coronavirus disease (Covid-19) on the global banking system. “It is important that banks and supervisors are able to commit their full resources to respond to the impact of Covid-19. This includes providing critical services to the real economy and ensuring that the banking system remains financially and operationally resilient. The measures endorsed by GHOS today aim to prioritise these objectives and we remain ready to act further if necessary,” said François Villeroy de Galhau, Chairman of the GHOS and Governor of the Bank of France. 
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by Ahsan Habib

The coronavirus (COVID-19) outbreak is causing widespread concern and economic hardship for consumers, businesses and communities across the globe. The situation is changing quickly with widespread impacts. Cyber hackers hit the U.S. Health and Human Services Department with an attack few days back during a presentation and update on the nation’s response to the coronavirus pandemic. Historically these criminals and hackers are as callous as they are opportunistic. We must also be wary of official-looking emails telling bank/FI staff to click on a link to learn more about how to stop the spread of the virus. Financial Crime Watchdogs across the globe has already warned about skimping on Anti Money Laundering and advised to be wary of the incoming flood of fraud. Financial institutions have been advised to remain alert about malicious or fraudulent transactions similar to those that occur in the wake of natural disasters. 
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The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has decided to keep the date of application of the transparency calculations for equity instruments of 1 April 2020 unchanged. ESMA has recently been asked by some stakeholders to postpone the date of application – required by MiFIDII/MiFIR to apply from 1 April, on the basis of the extraordinary market circumstances created by the COVID-19 pandemic. The application of new tick-sizes was cited as particularly problematic in the current environment. ESMA acknowledges the severity of the situation and is working to alleviate market participants’ burden to the maximum extent possible, as some recent publications show, in particular delaying the application of new obligations which require significant technological changes.
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