Business and markets: news in brief
News on the market response to the crisis, the impacts of that response and the repercussions around the world.
5 August 2020: Women are likely to be harder hit than men by trade disruptions caused by the COVID-19 pandemic and the dangers are particularly acute in developing countries according to a new information note from the WTO Secretariat. The paper points to how governments’ policy responses could address gender-specific effects of the crisis.
31 July 2020: Listed companies still focusing on short-term, according to recent study – A Commission review of directors’ duties and sustainable corporate governance suggests listed companies need to do more to embed sustainability into corporate governance frameworks. The Commission is due to follow up with a public consultation on sustainable corporate governance after the summer.
31 July 2020: Only five percent of insurers assets are green – EIOPA’s financial stability report also indicates that only five percent of insurers’ exposures – or €450bn worth of the €11.4trn assets under management – would be classified as sustainable under the EU taxonomy.
31 July 2020: Roadmap for pandemic insurance published by EIOPA – The paper, produced with industry input, suggests different ways to pool public and private money to better protect businesses from future pandemics – reflecting also discussions between a number of European countries.
31 July 2020: In its latest financial stability report, the European Insurance and Occupational Pensions Authority finds that the sector was able to cope with the initial market shocks due to COVID-19 but that significant downside risks remain looking ahead.
31 July 2020: ECB assessment shows banks resilient to coronavirus-induced stress, for now – Analysis of the banking sector’s potential vulnerabilities over a three-year period show that, overall, the sector can withstand stresses related to the pandemic shock – but that bank capital could be materially depleted if the situation worsens. The assessment focuses on a central scenario (projecting a fall in GDP of 8.7 percent this year) and a severe scenario (with a 12.6 percent decline in GDP).
30 July 2020: The WTO and the World Bank have launched a joint publication “Women and Trade: The role of trade in promoting gender equality”.
28 July 2020: Euro area banking sector resilient to stress caused by coronavirus, ECB analysis shows.
27 July 2020: While import-restrictive measures introduced by WTO members continue to affect a growing share of global trade, a recent WTO report also indicates a shift towards import-facilitating measures, including products related to the COVID-19 crisis.
24 July 2020: Fitch Ratings finds that the €750bn recovery fund agreed by EU leaders is net supportive for EU sovereign ratings. They believe it could become a more permanent feature of the EU's institutional set-up.
24 July 2020: Proposed changes to the Benchmarks Regulation seek to remove legal uncertainty for contracts underpinning debt, loans, deposits and derivatives that are pegged to LIBOR.
24 July 2020: A stocktake conducted by the Financial Stability Board notes that while three quarters of supervisors consider or are planning to consider climate risks, most focus on the effect on asset prices and credit quality. Only a minority monitor underwriting, legal, liability and operational risks.
22 July 2020: Fitch Ratings reports that sustainable bank sub-debt may not stay green during crises. Key questions on how green subordinated bonds issued by banks will be treated in a stress scenario could remain unanswered until there are real-life case studies.
17 July 2020: Commission welcomes list of best practices to mitigate COVID-19 impact. The list, agreed by the financial sector, consumer and business organisations, sets out how different market participants can help ensure access to finance for SMEs and citizens. It covers payment moratoria, cashless payments, loan conditions and processing of insurance claims.
17 July 2020: Eurozone banks likely to tighten credit standards for businesses in Q3. The end of government support measures and continuing economic uncertainty could see tighter standards being applied according to the ECB’s latest bank lending survey.
17 July 2020: Fitch Ratings reports that 2020 infrastructure downgrades far exceed 2019 levels.
17 July 2020: Fitch Ratings reports that ERM II supports Bulgaria and Croatia but coronavirus clouds Euro prospects.
16 July 2020: A new report from LORCA shows UK cyber startups raised nearly £500m in the first six months of 2020. Investment was 940% higher compared to 2019.
3 July 2020: Eurozone manufacturing recovering after lockdown – the latest IHS Market PMI data suggests that the downturn in manufacturing across the eurozone was not quite as bad as initially predicted and is currently showing signs of a V-shaped recovery.
3 July 2020: Risks to financial stability increasing – the European Systemic Risk Board has highlighted the potential risks associated with ongoing economic distress, including widespread household and company defaults, high market volatility, ballooning government debt and challenges to financial institution’s profitability and asset quality.
26 June 2020: Banks warn of damage to global financial markets by protectionism – a report by the Institute of International Finance calls for supervisors to be attentive to the risks posed by fragmented approaches to protect regional markets from the ongoing economic consequences of the pandemic.
22 June 2020: ScottishPower unveils 10-point plan to deliver jobs and investment for green recovery.
22 June 2020: World trade fell sharply in the first half of the year due to the COVID-19 pandemic, but worst-case scenario projections from April seem less likely now, according to the WTO.
18 June 2020: Banks apply to borrow record €1.3trn at negative rates from the ECB, figures show.
15 June 2020: Global investors and corporates are divided over sources of future environmental, social and governance (ESG) risks.
12 June 2020: Coronavirus-related negative rating actions number 1,424 across corporates, financial institutions, public finance, infrastructure and sovereign sectors since March 1.
10 June 2020: WTO report looks at trade developments in poorest countries in wake of COVID-19.
10 June 2020: The COVID-19 pandemic has triggered the most severe recession in nearly a century and is causing enormous damage to people’s health, jobs and well-being, according to the OECD’s latest Economic Outlook.
8 June 2020: Business groups have warned that introducing a law to prevent foreign takeovers that threaten national security could have a “chilling” effect on investment in the UK.
3 June 2020: ESMA consults on financial services outsourcing to cloud services to help firms and regulators identify, address and monitor associated risks.
1 June 2020: UK businesses are switching exports from EU markets to the Commonwealth, BRICS and other developed economies, according to research from Aston University.
28 May 2020: Fitch Ratings says that North American insurers face key vulnerabilities and potentially unforeseen downside risks amid the fallout from the coronavirus pandemic.
27 May 2020: McKinsey & Company has set out how organizations can bring economic and environmental priorities together in ‘How a post-pandemic stimulus can both create jobs and help the climate’.
25 May 2020: COVID-19 is placing unprecedented challenges on EU banks, but they will be able to withstand potential credit risk losses.
20 May 2020: The TUC, which represents most UK unions, has called for a sustainable industrial base and a green recovery.
20 May 2020: Human Rights Watch says that this year’s forest fire season could be even deadlier.
20 May 2020: New Zealand’s prime minister Jacinda Ardern has suggested a four-day working week to boost tourism and help employees address work/life balance issues, The Guardian reports.
20 May 2020: Renewable energy is set to play a central role in the post COVID-19 economic recovery, but the global picture is mixed, says a report from EY.
20 May 2020: The International Energy Agency’s report says that COVID-19 has hurt but not hindered the development of renewable power installations worldwide.
19 May 2020: Over 150 global corporations have urged world leaders for net-zero recovery from COVID-19 in a joint statement.
20 May 2020: Commerce 2040: Revolutionary Tech Will Boost Consumer Engagement, is a free report from Euromonitor International that explores how technology will revolutionise what it means to live, work, shop and play for consumers in 2040.
19 May 2020: E3G turns the spotlight to the role that cooling and energy efficiency can play in a green recovery.
18 May 2020: LatAm sovereigns' weak public finances make them particularly vulnerable to the coronavirus crisis, Fitch Ratings says.
18 May 2020: The airline industry is among the worst hit by the coronavirus pandemic, says Fitch Ratings.
18 May 2020: More than 150 multinationals call for Covid-19 aid to be aligned with climate goals, says BusinessGreen.
18 May 2020: Reclaim Finance has published a report revealing that the ECB’s corporate asset purchases significantly finances fossil fuels.
18 May 2020: China's road traffic levels appear to be recovering from the shock of the coronavirus outbreak, even as air traffic lags and port throughput faces additional looming challenges, says Fitch Ratings.
18 May 2020: Nigeria’s adherence to oil production cuts under the OPEC+ agreement will lead to deeper economic contraction and fiscal deficits and compound pressures on external finances from the slump in oil prices, says Fitch Ratings.
18 May 2020: The London Office Crane Survey Summer 2020 has been published by Deloitte. It shows the total volume under construction is up by 29% on the previous survey, the volume of new starts in six months to March is the highest on record, survey completions are down by 60%, and construction activity surged across most submarkets, with the City seeing a 38% uplift.
18 May 2020: ESMA sees ‘very high’ market risks. Updates to ESMA’s risk dashboard for 2020 highlight negative outlooks for securities markets, infrastructure and services and asset management.
15 May 2020: Cambridge Economics says a green stimulus package together with a VAT rate cut could lead the UK out of recession in 2021.
15 May 2020: Financial inclusion in developing markets has become even more important during the pandemic, mobile solutions are proving to be a lifeline in emerging economies, and fintech firms can use this opportunity to build their reputations and emerge stronger once the crisis has passed, says WEF.
14 May 2020: Politico has reported that coronavirus may be driving health insurers back to Obamacare.
14 May 2020: Friends of the Earth has reviewed over 100 lobby filings from prominent US oil and gas companies and their largest trade associations and reported that Big Oil has already benefited substantially from the initial policy responses to the coronavirus.
14 May 2020: Internationalism is not a luxury; it is a necessity, says Economist Jayati Ghosh, explaining how we can change the global economic architecture to enable a Global Green New Deal.
13 May 2020: The world economy is projected to shrink by 3.2% in 2020, says the UN. Under the baseline scenario, GDP growth in developed countries will plunge to -5.0% in 2020, while output of developing countries will shrink by 0.7%.
12 May 2020: The UN Environment Programme (UNEP) Environment and Trade Hub has published a policy brief that addresses COVID-19 and its effects on international trade and the environment.
13 May 2020: A special report has been published by Fitch Ratings that says that the total debt of companies in EMEA and the US who have lost their investment-grade debt ratings has reached USD150 Billion Since 1 March 2020.
13 May 2020: Fitch Ratings assumes the coronavirus pandemic will cause a 60% drop this year in European hotels' occupancy rates, which will not recover until at least 2023.
1 May 2020: The Implications of COVID-19 for the Global Economy is a Euromonitor International webinar that is available to all. The webinar looks at the possible economic outcomes globally and what this means for government policies, businesses and consumer behaviour.