EC is consulting member states on a draft proposal to prolong the State aid Temporary Framework until June 30, 2021 and adjust its scope. The temporary framework was adopted on March 19, 2020 to support economy in the context of the COVID-19 outbreak. The temporary framework allows member states to guarantee the availability of sufficient liquidity for businesses of all types and preserve the continuity of economic activity during and after the COVID-19 outbreak.
EC has issued a consultation on the draft proposal to:
- Prolong, at the current limits, existing provisions of the temporary framework (including for liquidity support) for an additional six months until June 30, 2021
- Extend the scope of the temporary framework by enabling member states to contribute to the fixed costs of companies (costs that are not covered by the revenues)
- Adapt the conditions for recapitalization measures under the temporary framework, in particular for the State's exit from enterprises where the State was an existing shareholder prior to the recapitalization
The proposed changes would allow the State to exit from the equity of such enterprises through an independent valuation, while maintaining the safeguards to preserve effective competition in the Single Market. The temporary framework was first amended in April 2020. In May 2020, EC adopted a second amendment extending the scope of the temporary framework to recapitalization and subordinated debt measures. In June 2020, EC adopted a third amendment extending the scope of the temporary framework to further support micro, small, and startup companies and incentivize private investments. The temporary framework was initially set to expire on December 31, 2020, except for recapitalization measures that may be granted until June 30, 2021.
Keywords: Europe, EU, Banking, COVID-19, Temporary Framework, State Aid Rules, Credit Risk, EC
Previous ArticleHM Treasury to Implement Relaxed EU State Aid Rule from July-End
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.
The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures
The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.
The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.
The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.
The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.
The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.