Subgobernadora. Euromed seminar. “Economic and regulatory support policies and exit strategies” (107 Ko)

Hello, first let me thank the invitation to participate in this interesting forum. It is a great pleasure for me to be part of this round table in which we will share an overview of the support policies implemented by the public authorities to mitigate the consequences of the global pandemic as well as the subsequent exit strategies of these measures. .

Indeed, the pace and the degree of intensity of the withdrawal of the support plans currently in force, will play a key role in the resumption of economic growth and in the potential risks that could affect financial stability.

However, before tackling this crucial question, allow me to recall all the measures taken and the way in which they have been articulated.

We must recognize that the rapid and coordinated response of the economic authorities in the fiscal, monetary and prudential areas has been essential to prevent the pandemic shock from becoming more persistent, generalized and, potentially, systemic, with more negative consequences on financial stability. .

Fiscal, monetary and prudential measures have played a key role in the response to the crisis, but I would like to focus my intervention on measures specifically targeted to support credit.

On the tax side, the government has supported the incomes of businesses and households by injecting liquidity into businesses through deferral of payment of tax obligations and by ensuring basic supplies. In the case of households, by providing for temporary adjustments to the workforce and, if this is not possible, by increasing unemployment benefits.

The reaction of central banks was also crucial in maintaining transmission of monetary policy fully operational channels and avoid fragmentation of financial markets. In the euro zone, the implementation of new long-term refinancing operations under very favorable conditions and the extension of the asset buyback program were decisive in avoiding any tightening of the financing conditions of the economies in a context of sharp increase in the financing needs of the public sector.

At microphone and macro-prudentiallevel, a coordinated response has taken place: allowing the use of capital buffers, limiting profit distributions, allowing flexibility in prudential regulation, preventing a mechanistic and pro-cyclical application of accounting standards, while at the same time recognizing a real depreciation, etc. these measures have made it possible to support the supply of financing to the private sector while maintaining the solvency of banks at adequate levels.

Furthermore, moratorium loan programs and government loan guarantee programs have been approved in all countries, allowing households and businesses to finance liquidity needs stemming from foreclosure restrictions. For example, in Spain mortgage and consumer loans under moratorium reached around 55 billion euros. Bank exposures from government guarantee loans to domestic enterprises and individual entrepreneurs exceed € 100 billion, or around 19% of total bank exposures to the corporate sector

Even if these measures have been adapted by each country to adapt them to the specific needs and the main characteristics of economic agents, coordination in

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Gloria Turner

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