EC Decides to Prolong and Adjust State Aid Temporary Framework
EC decided to prolong, and extend scope, of the State Aid Temporary Framework to support the economy in the context of the COVID-19 outbreak. All sections of the temporary framework are being prolonged for six months until June 30, 2021, except the section to enable recapitalization support, which is being prolonged for three months until September 30, 2021. EC published a communication to amend the State Aid Temporary Framework in the Official Journal of the European Union. Under the EU State Aid Rules, EC also approved two Swedish schemes to support companies affected by the COVID-19 outbreak.
The following are the key amendments to the State Aid Temporary Framework:
- Prolongation of the temporary framework—The temporary framework was initially set to expire on December 31, 2020, except for recapitalization measures that could be granted until June 30, 2021. The amendment prolongs the provisions of the temporary framework until June 30, 2021, except the recapitalization measures that are being prolonged until September 30, 2021. EC will review and examine the need to further prolong or adapt the temporary framework.
- Support for uncovered fixed costs of companies—The amendment introduces a new measure to enable member states to support, during the eligible period, companies facing a decline of at least 30% in turnover (in the context of COVID-19 outbreak) compared to the same period of 2019.
- Exit of the State from previously state-owned companies—EC adapted the conditions for recapitalization measures under the temporary framework, in particular for a member state's exit from the recapitalization of enterprises where the sate was an existing shareholder prior to the recapitalization. The amendment allows the state to exit from the equity of such enterprises through an independent valuation, while restoring its previous shareholding and maintaining the safeguards to preserve effective competition in the Single Market.
- Extension of the temporary removal of all countries from the list of “marketable risk" countries under the short-term export-credit insurance communication—Taking into account the continued general lack of sufficient private capacity to cover all economically justifiable risks for exports to countries from the list of marketable risk countries, the amendment provides for an extension until June 30, 2021 of the temporary removal of all countries from the list of “marketable risk" countries under the short-term export-credit insurance Communication.
- Press Release on Temporary Framework
- EC Communication on Temporary Framework
- News on Swedish Schemes
Keywords: Europe, EU, Sweden, Banking, COVID-19, Temporary Framework, State Aid Rules, Credit Risk, EC
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023
ISSB Standards May Become Effective from January 2024
The International Organization of Securities Commissions (IOSCO) welcomed the confirmation statement by the International Sustainability Standards Board (ISSB) setting out its progress in the development of its first sustainability-related corporate disclosure standards.