Financial institutions face two categories of emergencies arising out of the coronavirus disease that could impair their functioning. The first is directly financial: a sudden drop in the value of financial assets, or loss of liquidity, whether domestically or elsewhere in the world that could lead to a national or even global financial crisis. The second is operational: the failure of the support structures that underpin the financial system.
Over recent years, the financial services industry has come to be increasingly defined by, and reliant upon, new technologies and systems. Alongside the opportunities afforded by the increased use of technology, regulators are increasingly aware of the growing threat of disruption caused by technology outages and cyber-attacks.
Whilst EU regulators have traditionally focused on capital and liquidity risks when thinking about resilience of the financial sector, the shift towards an increasingly technology-reliant financial sector, and the high-profile IT outages and cyber-attacks this creates, has increased the focus on other risks to the stability of financial services firms.
In a letter to authorised credit brokers on 13 February, the FCA explain what they considered to be the key risks credit brokers pose to their consumers or markets.
The new guidelines are more prescriptive than the previous guidance and have a broader scope, applying to payment and e-money companies for the first time.
Despite August being the height of the holiday season, central bankers at the ECB have found the time to issue a newsletter calling on banks supervised under the Single Supervisory Mechanism to step up their Brexit preparations.