‘Financial authorities need flexibility to help virus-hit economy’

A top financial regulatory body urged authorities Friday not to panic and keep funds flowing during the coronavirus pandemic.

The Financial Stability Board, which coordinates the work of national authorities around the world, said in a recent statement that the global financial system is in a better position to cope with the severe market shock from COVID-19, than it was for the global financial crisis in 2008.

However, it called on authorities to take action to support market functions by ensuring that capital and liquidity resources in the financial system are available where they are needed. 

The FSB, made up of regulators, central banks and treasury officials from the Group of 20 nations, have pushed to strengthen financial systems and have increased the stability of international financial markets through a series of tougher rules such as much higher bank capital requirements. 

“The FSB encourages authorities and financial institutions to make use of the flexibility within existing international standards to provide continued access to funding for market participants and for businesses and households facing temporary difficulties from COVID-19,” the FSB said. 

It also said that the board members are cooperating closely to maintain global financial stability amid the virus outbreak. 

“Many members of the FSB have already taken action to release available capital and liquidity buffers, in addition to actions to support market functioning and accommodate business continuity plans,” it added.

By Jie Ye-eun (yeeun@heraldcorp.com)