Finance and Markets Global Insight - Issue 19, 2020

As the markets continue to operate in the grip of a global pandemic it would be easy to dwell on the potential economic concerns that are being felt across numerous industries ranging from retail through hospitality and aviation and a wide range of other interconnected sectors. Governments however continue to shore up businesses through loan schemes, liquidity measures and support structures including tax deferrals and forbearance measures which makes us believe that the true economic impact may be felt more in the first quarter of next year than the current period. We look at how the European Commission has introduced proposals to bring into effect changes to the prospectus regime, the workings of the capital markets and securitisation regulations to support a recovery in a hoped for post COVID 19 environment. Time will tell if these measures will be sufficient or will prove effective or not.

In this issue we wanted, however, to look at two other major themes of our time. As global warming continues to emerge as one of the most concerning issues for humankind over the years ahead, Governments may be getting more serious about imposing constraints and measures on manmade warming activity. Europe unveils its action plan for financing sustainable growth. We also consider the climate risk reporting regime which aims to embed climate risk accountability into business activity. In the corporate bond space we look at the developing interest in sustainability linked bonds and sustainability principles that we may all be required to live by.

We are seeing ever more serious focus on developing a digital economy. We look at the response to the European Commission's consultation on the Digital Finance Strategy. In the UK the Government consults on the financial promotions regime and cryptoassets. In France we have seen court decisions in relation to bitcoin. The challenges to the global economy posed by the Coronavirus remains our most immediate threat, however the impact of changes brought about by themes of environmental change and changes driven by advances in technology are likely to run for many years ahead and well beyond the current impact of the coronavirus.