The global capital markets have taken a toll since the advent of COVID-19 took center stage, during which regulators have been preparing responses to the pandemic situation in order to maintain the stability and safe functioning of financial market infrastructures (FMI).
The International Organization of Securities Commissions (IOSCO) issued a media release on the 25th March stating: “The IOSCO Board is committed to ensuring that capital markets continue to function throughout this difficult period in an open and orderly manner to enable all participants to price and transfer risk across all traded asset classes. Importantly, continued functioning of equity, credit and funding markets supports the efforts of the real economy in dealing with the COVID19 crisis through access to funding and through the ability to hedge risks.”
IOSCO has been working in parallel with the Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI) and the International Association of Insurance Supervisors (IAIS) in order to align objectives and indeed coordinate appropriate responses to address the issues accordingly.
Meanwhile, the European Securities and Markets Authority (ESMA) the EU financial regulatory authority which regulates EU based CCPs, has issued an updated ESMA Risk Dashboard on the 2nd April in light of COVID-19. The risk assessment highlights the risk level across the securities markets, infrastructures & services, and asset management.
Global CCPs have been issuing a variety of regular updates in relation to their business continuity plans and end-to-end provisions to highlight the stability that CCPs have during the current situation. Exchanges and CCPs around the world have developed and frequently tested a variety of business-disruptive scenarios (such as the current pandemic) which precisely ensures their preparedness during times of stress in order to maintain fluid business operations and to function as designed.
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