At their next meeting via videoconference, EU finance ministers are expected to adopt a declaration calling on banks to continue lending to households and businesses in difficulty as a result of the COVID-19 pandemic and to ensure the smooth operation of the insurance sector.
On Wednesday 8 April, Member States' ambassadors to the EU are expected to give the green light to the text before its formal adoption at the next virtual Ecofin Council, which according to our sources, will take place on 15 April. The text has already been endorsed by the Economic and Financial Committee, by written procedure, on 6 April.
“We call on the banking sector to support households and corporates affected by the COVID-19 outbreak, with the aim of ensuring business continuity”, states the document which EUROPE has obtained.
The text stresses the need to make full use of the flexibility provided for in the prudential and accounting framework, “at a time when sufficient financing to cover financial pressures is vital for the economy”.
It welcomes recent statements by the European Commission, the European Central Bank, the Single Resolution Board and the three European supervisory authorities on the application of regulatory and accounting requirements in the current exceptional circumstances.
In doing so, it calls on banks and insurers to follow these recommendations to the letter, in particular those on the temporary suspension of dividend payments to their shareholders (see EUROPE 12461/13, 12461/14), in order “to use the freed capital and available profits to extend credit or other urgent financing needs arising from the ongoing crisis to their customers in a way that helps to ensure preserving economic activity”.
The text also calls on supervisory authorities to continue to adopt “an ambitious and coordinated approach” in their recommendations and to ensure a level playing field between Member States.
Member States will continue to coordinate European and national measures and will not hesitate to take further measures, including through legislation, if necessary, the draft declaration states. (Original version in French by Marion Fontana)