Written by 17:16 COVID-19, Member

KPMG: SSM beyond COVID-19

Since September 2020, KPMG publishes a series on “SSM beyond COVID-19” focusing on current changes in the supervisory landscape and how banks can benefit from them. This campaign will include four publications on operational resilience, credit risk, ICLAAP and climate-related risks and sustainable finance.

Publication 1: Operational Resilience

The COVID-19 crisis has been an unexpected test of banks’ operational resilience, but other major disruptions are likely to occur in the future. It is essential for banks to strengthen their operational resilience and business continuity planning to weather this storm and prepare for possible future shocks. As the ECB itself notes, its priorities have increasingly turned to areas relating to the resilience and sustainability of banks.

In the first publication of the SSM beyond COVID-19 series, KPMG takes a look at how regulators and supervisors are responding – and how they are bringing their focus on operational resilience up to that of financial resilience.

Please find the full report on operational resilience here.

Publication 2: Credit Risk

Managing the effects of the crisis on credit risks and capital levels has been the top priority for banks.  Strong credit risk management is crucial to avoid the risk of a cliff edge and procyclicality. As we look longingly towards a future beyond COVID-19, it is worth reflecting on some lessons learned. This publication is the second instalment in the SSM beyond COVID-19 series.

This report looks into COVID-19 implications for the credit risk environment and how banks are responding to the challenges through such a period of stress. As the ECB itself notes, “inaction today will cost us tomorrow”. Looking ahead, further steps are expected to be taken from the industry in order to cope with the COVID-19 impact on credit risk.

Please find the full report on credit risk here.

Brief note: Publications 3 and 4 on the topics ICLAAP and climate-related risks and sustainable finance are pending.

Image: Alexander Jungmann/Pixabay

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