Government support for debt advice services
The Treasury has announced an extra £37.8 million of funding to provide essential debt advice services and help more people who are struggling with their finances due to coronavirus.
The distribution of the funding across England will be overseen by The Money and Pensions Service (MaPS) and will come from a combination of sources: £20.6 million from Government, £14.2 million will be raised through a one-off increase to the debt advice levy and a further £3 million contribution from MaPS. For the Devolved Authorities, £2m (out of an additional £5.9m) will come from the Devolved Authorities’ debt advice levy.
The FCA, as collection agent for these levies, we will consult on details in due course.
ESRB take further action in response to Covid-19
The General Board of the European Systemic Risk Board (ESRB) published a second set of actions in response to Covid-19 which include:
- Deciding to establish an EU-wide framework to monitor the financial stability implications of national support measures.
- Adopting a Recommendation that introduces minimum requirements for national monitoring and establishes a framework for reporting to the ESRB.
- Publishing a letter to the European Insurance and Occupational Pensions Authority (EIOPA) encouraging EIOPA to finalise and operationalise a liquidity monitoring framework for (re)insurers in response to Covid-19.
- Issuing a Recommendation on the restriction of distributions during Covid-19 (with accompanying background report).
- Issuing a Recommendation on liquidity risks arising from margin calls (with accompanying background report).
Emergency regulation and future planning
The FCA released a podcast interview (together with the transcript) with its Interim Chief Executive, Chris Woolard, which considers the regulatory response to Covid-19, and outlines areas of focus from its 2020/21 Business Plan, including retail investments, payments and protections for the consumer credit market.
Mr Woolard also discusses plans for the transformation of the FCA, and talks through the challenges and opportunities that technological advancements could bring for regulation and the financial services sector.
Revised LIBOR transition milestones
The PRA published an update to its joint letter with the FCA sent to nominated senior managers of major banks and insurers with responsibility for London Inter-bank Offered Rate (LIBOR) transition to confirm that a number of the Working Group on Sterling Risk Free Reference Rates’ (RFRWG) milestones included in the letter have since been revised to take Covid-19 into account.
Where appropriate, supervisors have contacted the relevant firms to confirm the supervisory expectations related to the RFRWG targets continue to apply to the amended target on new GBP LIBOR linked lending maturing after 2021.
BoE speech on financial system resilience
The Bank of England (BoE) published a speech given by Sir Jon Cunliffe, Deputy Governor of Financial Stability, which considers what can be learned from the performance of the financial system in response to Covid-19. Sir Jon also considers the effectiveness of the financial reforms introduced after the 2008 financial crisis.