March 31, 2020

Today we face economic upheaval potentially more severe than we witnessed during the global financial crisis. The coronavirus pandemic is a different kind of shock. Never before have modern economies shut down at the drop of a hat. From one week to the next, many workers lost their jobs and paychecks. Restaurants, hotels, and airplanes all emptied. And consumers and businesses now face steep losses in income—and potentially widespread bankruptcies.
Pressure on the banking system is growing and higher defaults on debt are imminent. And many now expect a shock to the financial sector similar in magnitude to the 2008 crisis.

Like the health experts, bank supervisors are responding to a fast-moving and extraordinary situation.

The question on the minds of policymakers is how they should prepare for this.
Just over a decade ago, global policy makers came together in an unprecedented display of coordination to launch the development of a revamped regulatory framework for the financial sector. They significantly raised the minimum standards for the quality and quantity of bank capital and liquidity and succeeded in building a more resilient banking system designed to hold buffers above the minimum that could be safely drawn down in stressed conditions.
In the current crisis, national authorities are taking a host of measures to provide fiscal support, and central banks are opening new liquidity lines. How should bank supervisors respond to ensure continued trust and confidence in the banking system?
Banking system prescription
Like the health experts, bank supervisors are responding to a fast-moving and extraordinary situation. Supervisors must combine the tools from their playbooks for dealing with natural disasters, operational risk events, and bank stress episodes. With its global vantage point, and drawing from past experience, the IMF can offer some additional guidance on the way forward:
• Don’t change the rules. Doing this in the midst of a crisis will likely cause more confusion. Likewise, be prepared to give banks time to meet rules if they fall short, and hold off on implementing new initiatives—banks should remain focused on maintaining ongoing operations, given the increased difficulties of conducting such operations remotely.
• Use the buffers. Regulators have to communicate clearly that capital and liquidity buffers should support continued bank lending, without adverse consequences for bank management. Banks built these buffers well above Basel minimum standards to manage strains on liquidity and revenue loss from missed loan repayments.
• Encourage loan modification. Supervisors should clearly communicate to banks to be proactive in rescheduling their loan portfolio for those borrowers and sectors that have been hard hit by the severe, but temporary, shock. They should also remind banks about flexible credit risk management and the accounting standards for impairment in these situations. Accounting bodies have helpfully stepped in to clarify to auditors how such modifications should be viewed once the economy begins to recover.
• Don’t hide the losses. Banks, investors, shareholders and even taxpayers have to bear them. Transparency helps prepare all stakeholders; surprises only worsen their response, as was proven during the 2008 crisis.
• Clarify regulatory treatment of support measures. Clarifying upfront how banks and regulators should treat fiscal measures, including measures directly targeted at borrowers, credit guarantees, payment holidays, direct transfers and subsidies—beyond any current guidance in the Basel capital framework—would help with overall transparency.
• Strengthen communication. Encourage continuous dialogue between supervisors and banks, especially in this unprecedented situation of working remotely with colleagues, customers, and supervisors. Typically, reporting requirements in key areas, such as liquidity and creditor positions, are enhanced in a crisis, but given operational disruptions, deferring other reporting requirements less material to assessments of financial health may make sense.
• Coordinate across borders. Banking is a global business. Broad coordination among national regulators at the international level is imperative. This crisis will pass eventually, and the effects may take time to dissipate, but preserving the integrity of the international framework will be crucial for the credibility and integrity of the global financial system. International bodies like the Financial Stability Board and the Basel Committee on Banking Supervision are working night and day to do just this.
Will it be enough?
Simply put, it may be too early to tell. At this point, conditions in many countries are as severe as the adverse scenario of the stress tests that banking regulators commonly use to assess the strength of their banking systems.
And it might get worse.
All of this assumes that economic activity could restart later this year, but we have to also consider more adverse scenarios. Under more severely strained circumstances, we will have to rethink our playbook substantially. Some banking systems might have to be recapitalized or even restructured. The IMF has deep experience in helping countries rebuild distressed banking systems through its technical assistance programs, and will stand ready to help.
AUTHORS:• Tobias Adrian and Aditya Narain
Compliments of the IMF.

March 31, 2020
• The IMF’s Executive Board has approved a framework for a new round of bilateral borrowing, to succeed agreements currently in place through end-2020
• This action is part of a broader package on IMF resources and governance reform that will help maintain the IMF’s lending capacity of $1 trillion
• These are critical steps to ensure that the IMF can support its membership through the global pandemic now unfolding and beyond.
Washington, DC – The IMF Executive Board approved yesterday a framework for a new round of bilateral borrowing by the IMF from January 1, 2021, to succeed the current bilateral borrowing agreements (BBAs) currently in place through end-December 2020 . The framework is broadly the same as that agreed in 2016 for the current BBAs. The new BBAs will have an initial term of three years through end-2023, which is extendable by one more year through end-2024. These new agreements will help maintain the IMF’s lending capacity of US$1 trillion for the next few years, ensuring its ability to respond to members’ needs.
The BBAs are the IMF’s third line of defense after quotas and the New Arrangements to Borrow (NAB). Today’s Executive Board decision is part of a broader package on IMF resources and governance reform endorsed by the IMF membership during the 2019 Annual Meetings, and builds on the Board’s January 2020 approval of a doubling of the NAB and guidance on quota reforms.
The new BBAs and the doubling of the NAB are expected to take effect on January 1, 2021, subject to timely approvals by creditor member countries and their institutions. These are critical steps to ensure that the IMF can support its membership through the global pandemic now unfolding and beyond.
Compliments of the IMF.

30 March 2020
Today, the Commission has issued new practical advice to ensure that mobile workers within the EU, in particular those in critical occupations to fight the coronavirus pandemic, can reach their workplace. This includes but is not limited to those working in the health care and food sectors, and other essential services like childcare, elderly care, and critical staff for utilities. Together with the Guidance on the implementation of the temporary restriction on non-essential travel to the EU also issued today, this responds to requests made by EU leaders on 26 March and seeks to address practical concerns of citizens and companies affected by the measures taken to limit the spread of the coronavirus, as well as of national authorities implementing the measures.
While it is understandable that Member States have introduced internal border controls to limit the spread of the coronavirus, it is imperative that critical workers are able to reach their destination without delay.
Nicolas Schmit, the Commissioner for Jobs and Social Rights, said: “Thousands of women and men working hard to keep us safe, healthy and with food on the table need to cross EU borders to go to work. It is our collective responsibility to ensure that they are not hindered in their movement, while taking every precaution to avoid further spread of the pandemic.”
The guidelines published today identify a range of workers that exercise critical occupations, and for which continued free movement in the EU is deemed essential. The list provided in these guidelines is not exhaustive. Examples include health associate professionals, child and elderly care workers, scientists in health-related industries, those needed to install critical medical devices, firefighters and police officers, transport workers, as well as persons working in the food sector. The Commission urges Member States to establish specific burden free and fast procedures to ensure a smooth passage for such frontier workers, including proportionate health screening.
Beyond these specific categories of workers, the guidelines also clarify that Member States should allow frontier workers in general to continue crossing borders if work in the sector concerned is still allowed in the host Member State.Member States should treat cross border workers and national workers in the same manner.
As regards seasonal workers, particularly in the agricultural sector, Member States are asked to exchange information on their different needs at technical level and to establish specific procedures to ensure a smooth passage for such workers, in order to respond to labour shortages as a result of the crisis. Seasonal workers in agriculture perform in certain circumstances critical harvesting, planting and tending functions. In such a situation, Member States should treat those persons as critical workers and communicate to the employers the necessity to provide for adequate health and safety protection.
These guidelines complement the recently adopted Guidelines for border management measures to protect health and ensure the availability of goods and essential services as well as the Guidance on the implementation of the temporary restriction on non-essential travel to the EU which were also presented today.
The Commission will continue to identify the best practices with Member States which can be extended to all Member States for allowing workers to exercise their crucial occupations without undue hindrance.
Background
The coronavirus pandemic has led to the introduction of unprecedented measures across EU Member States, including reintroduced checks at the internal borders.
Frontier workers, posted workers as well as seasonal workers live in one EU country but work in another. Many of them are crucial for their host Member States, for instance for the health care system, the provision of other essential services including the setting up and maintenance of medical equipment and infrastructure, or ensuring the supply of necessity goods. A coordinated approach at EU level is therefore key.
On 26 March, the Heads of State or government stated: “We will urgently address, with the assistance of the Commission, the remaining problems concerning EU citizens blocked at internal EU borders and prevented from returning to their home countries and cross-border and seasonal workers who have to be able to continue essential activities while avoiding further spread of the virus.” These guidelines presented today are the Commission’s immediate response to this call, alongside the Guidance on the implementation of the temporary restriction on non-essential travel to the EU which include the repatriation of EU citizens.
Compliments of the European Commission.

30 March 2020 | 13:15
The EU is taking swift action to make available money to help tackle the effects of the COVID-19 pandemic.
The Council today adopted two legislative acts to quickly release funding from the EU budget for tackling the COVID-19 crisis. One of the acts amends the rules of the structural and investment funds, while the other extends the scope of the EU Solidarity Fund.
The Coronavirus Response Investment Initiative will give member states access to €37 billion of cohesion money to strengthen healthcare systems, as well as support small and medium-sized enterprises, short-term working schemes, and community-based services.
Of the total, about €8 billion will come from unspent pre-financing in 2019 under the structural funds. The new measure allows member states to spend unused money to mitigate the impact of the pandemic instead of returning it to the EU budget. Another €29 billion will be disbursed early from allocations which would have been due later this year.
Expenditure will be made available as of 1 February 2020 to cover costs already incurred in efforts to save lives and protect citizens.
Member states will also have greater flexibility to make transfers between cohesion policy programmes in order to redirect resources to where they are most needed.
The Council also amended the scope of the EU Solidarity Fund to include public health emergencies in addition to natural disasters. This will help member states and accession countries meet people’s immediate needs during the coronavirus pandemic.
Next steps
Given the urgency of the situation, both legislative acts will be published in the Official Journal of the European Union on 31 March and will enter into force on 1 April 2020.
Regulation concerning the Coronavirus Response Investment Initiative
Regulation extending the scope of the EU Solidarity Fund
Compliments of the European Council.

March 25, 2020
Yesterday, the Commission adopted decisions on harmonised standards which will allow manufacturers to place on the market high performing devices to protect patients, health care professionals and citizens in general. The standards will facilitate a faster and less expensive conformity assessment procedure. The revised harmonised standards play a pivotal role in the current coronavirus pandemic because they relate to critical devices* such as:
medical face masks
surgical drapes, gowns and suits
washer-disinfectors
sterilisation
Stella Kyriakides, Commissioner for Health said: “We must not waste a second in our fight against the coronavirus. With the measures we adopt today, we speed up the entry of safe, essential medical equipment and devices such as masks, gowns and suits in the EU market. This equipment is fundamental for our health professionals – the brave and resilient women and men at the front line – to keep saving lives”.
Once implemented, the use of these standards will allow manufacturers of medical devices and other concerned economic operators, to comply with the health and safety requirements of the EU legislation, taking into account the most updated technical solutions. These standards, once referenced in the Official Journal of the European Union, grant conformity of devices with the requirements of the three Directives on medical devices.
The decision to adopt these harmonised standards for medical devices represents an additional measure taken by the Commission to respond to the coronavirus outbreak. Also upon the urgent request of the Commission, the European Committee for Standardization (CEN) and the European Committee for Electrotechnical Standardization (CENELEC), in cooperation with their members made available a number of European standards for certain medical devices and personal protective equipment.
Background
European standards are an essential pillar of a fully functioning internal market. They reduce costs, promote innovation, ensure interoperability between different devices and services, and help companies to access markets.
To support EU product legislation, the Commission can request the development of European harmonised standards to facilitate compliance by manufacturers of the relevant requirements. Once agreed and referenced in the Official Journal of the European Union, these harmonised standards become part of EU law and allow companies an easy and direct access to the internal market for their products, while ensuring a high degree of safety for users and consumers.
European legislation for medical devices also relies on harmonised standards. In particular, under the three current directives on medical devices, there are about 300 harmonised standards conferring presumption of conformity with the legal essential requirements. The Commission and the concerned European standardisation organisations (CEN and CENELEC) continuously work together to update and improve the set of harmonised standards available to economic operators in the EU. In such a common effort to face the coronavirus pandemic, the Commission, CEN and CENELEC have agreed to make a number of harmonised standards for important medical protective equipment like face masks and single-use gloves freely available to those companies that are willing to start producing these items.
Compliments of the European Commission.

On March 24, 2020, the U.S. Department of Labor released an initial set of questions and answers (Q&As) concerning the recently enacted Families First Coronavirus Response Act (FFCRA). The Q&As focus on the law’s provisions relating to new emergency paid sick leave (EPSL) and emergency paid Family and Medical Leave Act benefits (FMLA+). As it continues to accept feedback regarding the FFCRA, the DOL may release additional Q&As on more issues, or clarify issues in the existing guidance, before the law takes effect on April 1, 2020. LEARN MORE
AUTHORS:
• Jim Paretti, Jeff Nowak, Alexis Knapp, Sebastian Chilco, and Michael J. Lotito
Compliments of Littler Mendelson – a member of the EACCNY.

March 19, 2020
With the outbreak of COVID-19, we have seen the proliferation of significant quantities of news, myths, and disinformation about it – coming from various sources both within and outside of the European Union. The World Health Organisation has stated that the outbreak of and response to COVID-19 has been accompanied by a massive “infodemic”, which the WHO describes as an over-abundance of information – some accurate and some not – rendering it difficult to find trustworthy sources of information and reliable guidance.
Today, the information environment around the coronavirus is characterised by an immense amount of content from different sources and on different media. Governments and health authorities are trying to provide authoritative information about COVID-19 and social media platforms are looking for effective ways to promote this content, while simultaneously demoting or removing unreliable content. At the same time, we are witnessing a substantive amount of both misinformation and disinformation spreading on- and offline. While misinformation involves the unintentional spread of false information, disinformation campaigns entail the intentional production and/or dissemination of verifiably false content, spread either for political or financial reasons.
CONTINUE READING…
Compliments of the EEAS.

23/03/2020 – 18:22
COVID-19 will reshape our world. We don’t yet know when the crisis will end. But we can be sure that by the time it does, our world will look very different. How different will depend on the choices we make today.
“COVID-10 will reshape our world. We don’t yet know when the crisis will end. But we can be sure that by the time it does, our world will look very different.” – Josep Borrell, 
The COVID-19 crisis is not a war but it is ‘war-like’ in that it requires the mobilisation and direction of resources at unprecedented levels. Solidarity between countries and a readiness to make sacrifices for the common good are decisive. Only by pulling together and cooperating across borders can we beat the virus and contain its consequences – and the EU has a central role to play. This was the clear and united position of EU Foreign Ministers when we discussed the crisis on 23 March via video-link.
It is sometimes said that wars are won not by tactics or even strategy, but by logistics and communications. This seems true for COVID-19 as well: whoever is best at organising the response, quickly drawing on lessons learnt from around the world and communicating successfully towards citizens and the wider world, will come out strongest.
There is a global battle of narratives going on in which timing is a crucial factor. In January, the dominant framing was of this being a local crisis in Hubei province, aggravated by the cover up of crucial information by Chinese party officials. Europe was sending a lot of medical equipment to help Chinese authorities that were overwhelmed at the time. Since then, China has brought down local new infections to single figures – and it is now sending equipment and doctors to Europe, as others do as well. China is aggressively pushing the message that, unlike the US, it is a responsible and reliable partner. In the battle of narratives we have also seen attempts to discredit the EU as such and some instances where Europeans have been stigmatised as if all were carriers of the virus.
The point for Europe is this: we can be sure that perceptions will change again as the outbreak and our response to it evolves. But we must be aware there is a geo-political component including a struggle for influence through spinning and the ‘politics of generosity’. Armed with facts, we need to defend Europe against its detractors.
There is also a battle of narratives within Europe. It is vital that the EU shows it is a Union that protects and that solidarity is not an empty phrase. After the first wave in which national authorities took centre stage, now the EU is coming to the fore with joint actions on all tracks where member states have empowered it to act: with joint procurement of vital medical equipment, with a joint economic stimulus and a necessary relaxation of fiscal and state aid rules.
In addition, the EU’s role contains a big external component. We are assisting member states with their consular efforts, helping to bring stranded Europeans back home. For example, in the past week, joint efforts in Morocco enabled the repatriation of around 30.000 EU citizens. This shows that we can deliver together. 
Much more remains to be done. Worldwide, around 100,000 European travellers have registered at local embassies or consulates but the true figure of those that need to come home lies much higher.
A global pandemic needs global solutions and the EU has to be at the centre of the fight.  I am in touch with partners around the world, from Asia, Latin America and Africa, to help build a coordinated international response. In a crisis, the human instinct is often to turn inwards, to close borders and fend for yourself. While understandable, this stance is self-defeating. The COVID-19 emergency cannot be solved within one country, or by going it alone. Doing so simply means all of us will struggle longer, with higher human and economic costs.
What we should work for instead is a radical scaling up of international cooperation among scientists, economists and policy-makers. At the UN, the WHO and the IMF. Within the G7 and G20 and other international fora. Pooling resources to work on treatments and a vaccine. Limiting the economic damage by coordinating fiscal and monetary stimulus measures and keeping trade in goods open. Collaborating on re-opening borders when scientists tell us that we can. And fighting on-line disinformation campaigns. This is a time for solidarity and cooperation, not blame games which will not heal a single infected person.
While the needs are great at home, the EU should also be ready to assist others in fragile situations who risk being overwhelmed. Just think of the refugee camps in Syria and what would happen if COVID19 broke out there to people who have already suffered so much. In this respect Africa is a major concern. With Ebola it may have built more recent experience with handling pandemics than Europe, but health systems overall are very weak and a full outbreak would wreak havoc. Social distancing and living in confinement is exponentially more difficult in densely populated urban areas of Africa. Millions in Africa make their living in the informal economy and will have to handle the outbreak without any social safety net. Even before the virus has hit the continent, Africans, with other emerging economies, have to deal with a massive level of capital withdrawal. 
Elsewhere countries like Venezuela or Iran may well collapse without our support. This means we should ensure they have access to IMF assistance. And with Iran, we need to make sure that legitimate humanitarian trade can proceed despite US sanctions.
We should also remember that none of the other problems that we focused on before the corona-crisis, has gone away. In fact, they may get worse. COVID-19 may well deepen some of the longer running conflicts in the neighbourhood. As Europe we already had to navigate a world of growing geo-political tensions, especially between the US and China. Here too, the risk is that COVID-19 will compound pre-existing trends.
Overall the task for the EU is to defy the critics and demonstrate in very concrete terms that it is effective and responsible in times of crisis. Jean Monnet wrote in his memoirs that “Europe will be forged in crises, and will be the sum of the solutions adopted for those crises.” Let that be our guiding philosophy as we battle this crisis and prepare for what comes after.
Compliments of the EEAS. 

Commits policy support, saying efforts must have “Ambition of Marshall Plan, vision of New Deal”
21/03/2020 – OECD Secretary-General Angel Gurría called today for sweeping joint action by governments to defeat the health, economic, and social threats of the coronavirus (Covid-19) pandemic.  In calling on governments to better coordinate their efforts, Gurría announced that the OECD would channel its efforts into immediate support to policymakers combating the crisis, launching a new online policy hub immediately.
“The coronavirus pandemic is a public health crisis without precedent in living memory, and it is also setting in motion a major economic crisis. It looks increasingly likely that we will see sequential declines in global GDP or regional GDPs in the current and next quarters of 2020, and we must act now to avoid a protracted recession,” Mr Gurría said. “Only a sizeable, credible, internationally co-ordinated effort can deal with the immediate public health emergency, buffer the economic shock and develop a path towards recovery. We must take special care to support the most vulnerable in their health and their daily lives. Everything must be done to earn the confidence of citizens, who felt the weaknesses in our economies before all this began.”
In a statement, Mr Gurría called for immediate policy action in four specific areas:
Responding to the health challenge: Scientific effort must be complemented by regulatory and other measures to ensure that vaccines and treatments are developed, produced, and deployed as quickly as possible. 
Shoring up the economy: Governments should cushion immediate negative impacts with coordinated spending across sectors such as:
Health care: to cover extensive testing; treatment for all patients, regardless of whether they are insured or not; support to health-care workers; return of health-care retirees, while protecting high-risk groups; the enhanced provision of masks, ICUs and respirators, among others;
People: to cover short-term employment schemes, reduced requirements to benefit from unemployment insurance, cash transfers to the self-employed and support to the most vulnerable;
Firms: to cover charges and tax payment delays, temporary VAT reductions or deferrals, enhanced access to working capital through credit lines or state guarantees, special support packages for SMEs, especially those in services and tourism.

Combining efforts for financial regulation and supervision: Building on action underway by Central Banks, co-ordinated monitoring, diagnosis of emerging strains and coherent regulatory action will produce more positive results.
Restoring confidence: Addressing trade tensions, high corporate debt, and economic inequalities that deepen danger for the most vulnerable will help to resolve underlying weaknesses exacerbating the shock.
Read the full statement.
The OECD platform launched in response to the crisis will provide timely and comprehensive information on policy responses in countries around the world, together with OECD advice. Policy briefs will cover a range of subjects – from vaccines to education to taxes and small business – to help governments learn from each other and coordinate in real time”. 
“This is the third and greatest economic, financial and social shock of the 21st century, and it demands a modern, global effort akin to the last century’s Marshall Plan and New Deal – combined,” said Mr Gurría. “That effort must focus especially on those who were already in physical, economic and social precarity, and strengthen the foundation for our common future. As governments accelerate this work, multilateral action will make their initiatives far more effective than if countries continue to act alone.”
Mr Gurría announced that despite the challenges to economic forecasting posed by the changing crisis, the OECD will continue to update and share its analysis regularly as part of its policy support.
Compliments of the OECD.