KPMG ECB Office: Implications of COVID-19 on the European banking sector

Since March 2020, KPMG‘s ECB Office has published a new newsletter dealing with the impact of COVID-19 on the European banking sector. The insights and materials have been created to help you respond to the challenges of the present, and prepare for the future and the new reality.


The latest articles include:

Recovery planning during COVID-19 – EU requirements and challenges for banks

  • Regulatory and supervisory expectations
  • The main challenges for banks
  • Recovery options
  • Recovery plan scenarios

The unprecedented COVID-19 crisis has brought about many challenges for the financial sector. Regulators and supervisors continue in their efforts to ensure banks can focus on core operations and effective crisis management and preparedness. A key element hereto are recovery plans, which aim at restoring banks’ financial and economic viability under stress.

Read the full article at: Recovery planning during COVID-19 – EU requirements and challenges for banks


Managing credit risk and capital procyclicality in the context of COVID-19

  • What do European banks need to know?
  • Supervisory, regulatory and governmental actions to limit procyclicality in Europe
  • Procyclicality, credit risk and capital – An industry perspective

The COVID-19 pandemic is putting European banks and financial institutions at the heart of a fast-changing crisis.

Initially, the major challenge for banks came from liquidity management – the result of country lockdowns that resulted in deteriorating corporate revenues and drawdowns of credit facilities as well as national measures to ease payment pressures on individuals and businesses. However, as the crisis continues banks and supervisors are shifting their focus to credit quality and loan impairments.

The good news is that supervisors and regulators are already taking a range of actions to provide additional guidance to manage procyclical effects on financial systems and the wider economy. This should support the industry with their activities and approaches, but much remains to be done.

Read the full article at: Managing credit risk and capital procyclicality in the context of COVID-19


A supervisory view of IT and cyber risks since the outbreak of COVID-19

  • Where are banks now as we enter this new normal?
  • How did supervisors position themselves in reaction to the COVID-19 pandemic and how are they assessing banks’ actions so far?
  • What are the short-term implications for banks from a business and regulatory perspective?

Prior to the COVID-19 pandemic, the positioning of the ECB when it came to ICT and cyber risks was clear: they were a key priority. The 2020 SSM risk map identified cybercrime and IT deficiencies as one of the top three risks faced by the euro area banking system. The SSM cyber incident reporting framework has ensured that all directly supervised banks report significant cyber incidents to the ECB as soon as they are detected.

Read the full article at: A supervisory view of IT and cyber risks since the outbreak of COVID-19

 

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