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We are closing this trial so this is your last weekly e-mail unless you subscribe to either our Standard service - or the Gold service that effectively makes GahamBishop.com your personal researcher.

 However, as the coronavirus pandemic grips the financial system ever-more tightly, we have decided to break for Easter early. I fear that the equity market is foretelling a very different system at the end of the crisis and that will require fresh thinking all round. In the meantime, take care and be safe.

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General Policy

Joint statement on the need of keeping European markets open : A group of ten associations (AFME, Better Finance, Insurance Europe, EFAMA, AIMA, European Issuers and others) has written to several European and national policymakers to emphasise the importance of keeping European financial markets open during the COVID-19 pandemic. View Article

Joint market trade associations statement: Keeping financial markets open amid coronavirus : The associations (such as ISDA, The Managed Fund Association, FIA, Financial Services Forum, NASDAQ, AIMA and others) declare that the US financial markets are critical infrastructure to our nation, and they continue to function as designed despite the volatility caused by the coronavirus. View Article

FSB coordinates financial sector work to buttress the economy in response to COVID-19 : The FSB, representing a broad and diverse membership of national authorities, international standard setters and international bodies, is actively cooperating to maintain financial stability during market stress related to COVID-19. View Article

Banking Union

Vox EU: ‘Stress tests’ for banks as liquidity insurers in a time of COVID : This column argues that regulators should plan in advance for such a severe stress test posed by the coronavirus crisis by ensuring that banks prevent any further capital depletion through dividend payouts or share buybacks.  View Article

Bruegel: Banks in pandemic turmoil : The banking system is critical to society and requires attention and support. In doing so, however, tough love is preferable to complacency, writes Nicolas Véron. View Article

ECB banking supervision provides further flexibility to banks in reaction to coronavirus : The European Central Bank announced further measures to ensure that its directly supervised banks can continue to fulfil their role to fund households and corporations amid the coronavirus-related economic shock to the global economy.  View Article

BIS: Basel Committee coordinates policy and supervisory response to Covid-19 : The Basel Committee on Banking Supervision held a conference call to discuss the impact of the rapid worldwide spread of the coronavirus disease (Covid-19) on the global banking system.  View Article

EBA provides clarity to banks and consumers on the application of the prudential framework in light of COVID-19 measures : The EBA issued a second statement to explain a number of additional interpretative aspects on the functioning of the prudential framework in relation to the classification of loans in default, the identification of forborne exposures, and their accounting treatment.  View Article

Vox EU: Covid Perpetual Eurobonds: Jointly guaranteed and supported by the ECB : This column argues that no institutional or legal constraints prevent this policy response. Prompt action is critical since allowing one crisis to morph into many could disrupt the European project, with far-reaching and unpredictable political implications. View Article

Financial Institutions

IAIS releases 2019 Global Insurance Market Report (GIMAR) : The (re)insurance sector operates in a challenging global financial setting that is highly prone to vulnerabilities. Persistent trade tensions and slower economic growth may lead to the repricing of risks. This in turn may amplify low-yield vulnerabilities that have built up over previous years.  View Article

Capital Markets Union

ECMI: Can Europe's finance sector resist COVID-19? : General Manager of ECMI Karel Lannoo writes that we are back in crisis mode. In a matter of only three weeks, Europe has turned from boom to bust for markets and businesses. View Article

Securities regulators coordinate responses to COVID-19 through IOSCO : Members of IOSCO, who regulate over 95% of the world’s capital markets, are cooperating closely on their responses to the disruption in capital markets resulting from the macroeconomic impact of COVID-19 on the global economy. View Article

Economic Policies Impacting EU Finance

Video conference of the Eurogroup : The Eurogroup took stock of all the measures taken at national and EU level to respond to the COVID-19 fallout. Ministers also discussed further policy responses that are being explored by EU institutions. View Article

Federal Reserve announces extensive new measures to support the economy : The central bank committed to buy as many US government bonds and mortgage-backed securities as needed “to support smooth market functioning.” View Article

POLITICO: Coronavirus could slash German economy by over 20 percent : The coronavirus crisis could cause the German economy to shrink by up to 20.6 percent this year, draining hundreds of billions of euros from the public budget, the Munich-based Ifo Institute said. View Article

Project Syndicate: A greater depression? : With the COVID-19 pandemic still spiraling out of control, the best economic outcome that anyone can hope for is a recession deeper than that following the 2008 GFC. But given the flailing policy response so far, the chances of a far worse outcome are increasing by the day, writes Nouriel Roubini. View Article

OECD: COVID-19: Joint actions to win the war : The pandemic brings with it the third and greatest economic, financial and social shock of the 21st Century, after 9/11 and the Global Financial Crisis of 2008. Stringent measures being applied, albeit essential to contain the virus, are thrusting our economies into an unprecedented “deep freeze” state, from which emergence will not be straightforward or automatic. View Article

IBTimes: EU finance ministers split on coronavirus rescue plan : EU finance ministers argued over crisis measures to help European countries withstand the economic shock of the coronavirus outbreak, with powerful Germany cautious about rewriting the rulebook. View Article

City AM: Coronavirus sparks record collapse in Eurozone output : The coronavirus pandemic caused the biggest collapse in Eurozone business activity ever recorded in March, preliminary survey data has shown, in an early sign of the havoc the virus is wreaking on European economies. View Article

Carlos Costa - Bloomberg

Reuters: ECB's Costa calls for 'coronabonds' to prevent new euro debt crisis : Eurozone governments should ponder the issuance of common “coronabonds” specifically in response to the coronavirus pandemic to prevent a potential new sovereign debt crisis, European Central Bank policy maker Carlos Costa said. View Article

ECB: The state of play regarding the deepening agenda for Economic and Monetary Union : This article provides an overview of progress with various aspects of the deepening of Economic and Monetary Union (EMU). The start of a new legislative period for the European Union (2019-24) provides a natural and opportune moment to take stock of progress towards completion of the architecture of EMU. View Article

ECB's De Guindos: Interview with Telediario 2, Televisión Española : Interview with Luis de Guindos, Vice-President of the ECB, in which he endorses the ECB's €750 bn investment in a new asset purchase programme, the coronavirus crisis and its possible consequences on the European and global economy. View Article

ECB's Schnabel: Interview with Frankfurter Allgemeine Sonntagszeitung : Interview with Isabel Schnabel, Member of the Executive Board of the ECB, regarding the ECB's asset purchases programme, boosted to counter the impact of coronavirus on European economy, and banks preparedness in reflection to the current crisis. View Article

Brexit

 

David McAllister - BBC

 

Future EU-UK relations: EU is offering ‘cooperation of an unprecedented nature’ : Statement by David McAllister, Chair of the European Parliament’s UK Coordination Group, on the publication of a draft legal agreement on the future EU-UK partnership. View Article

 

Graham Bishop retweeted
	Lucy Meakin @lucy_meakin
The U.K. economy will contract at least 10% in the first half of the year as the fallout from the coronavirus hammers output, according to Bloomberg Economics' @DanHanson41 bloomberg.com/news/articles/… pic.twitter.com/JL6UTvPvYe
Graham Bishop retweeted
	Mujtaba Rahman @Mij_Europe
IMPORTANT. @ecb President @Lagarde has **de-linked an ESM credit line (ECCL) from OMT support**. Why? @Lagarde unhappy at how unambitious Eurogroup's fiscal plans were proving ; wants to pressure finance ministers to do more. "Whatever it takes" now has a pretty serious wrinkle
Graham Bishop retweeted
	Bloomberg Brexit @Brexit
NEW: Angela Merkel's government approves an unprecedented 750 billion euro ($800 billion) package to protect Germany against the fallout from coronavirus trib.al/x7vBQ7D
Graham Bishop retweeted
	FT Brussels @ftbrussels
EU plans fiscal firepower boost to tackle coronavirus fallout on.ft.com/2Ur7ONA
Graham Bishop retweeted
	European Central Bank @ecb
The ECB estimates the impact of the Pillar 2 relief measures announced on 12 March to total €120 billion in CET1 capital. This enables banks to absorb losses or to potentially finance up to €1.8 trillion in loans to households and companies.
Graham Bishop retweeted
	Bloomberg @business
Boris Johnson dismissed calls to postpone Brexit, even as the coronavirus crisis delays trade talks and gradually monopolizes government time and resources trib.al/X6kryK9
Graham Bishop retweeted
	Bloomberg Brexit @Brexit
The ECB launches an emergency bond-buying program worth 750 billion euros in the latest attempt to calm coronavirus-hit markets trib.al/1FrRgyu
Graham Bishop retweeted
	FT Brussels @ftbrussels
Brexit transition deadline in doubt as talks called off on.ft.com/3a24zm8
Graham Bishop retweeted
	Bloomberg @business
Italy’s Prime Minister Giuseppe Conte called on European Union nations to issue “coronavirus bonds” to fund their response trib.al/w0MzvXs
	Graham Bishop @GrahamBishopcom
Looking at the market reactions to the weekend central bank moves, one can only be deeply disturbed... I've analysed the latest data from markets & looked into other #financialpanic crisis to see if there are parallels we can learn from #coronavirusimpact ow.ly/5Tju50yNIsz