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SEACEN Policy Analysis Issue #3

Publish Date: : May 2020
Author:: Glenn Tasky

Summary


This issue, “Crisis Preparedness in the Age of COVID-19: A Primer” authored by Glenn Tasky, SEACEN’s Director of Financial Stability and Supervision / Payment and Settlement Systems, sets forth the  complex issues that regulatory authorities (central banks, stand-alone regulatory authorities, and deposit insurance agencies, collectively RAs) may consider tackling promptly in dealing with the possibly severe  effects of the COVID-19 economic shutdowns and the likelihood of significant economic slowdown or recessions on the financial sector. Many RAs have taken steps to allow their banks to draw down capital and liquidity buffers, and some have softened provisioning requirements or the regulatory capital impact of higher provisions, but this paper goes further and outlines some additional actions that RAs may consider if they deem it appropriate under such systemic stress.