In order to support regulators around the world the ADA Chair in financial law (inclusive finance) works with its research partners on a number of papers that analyze regulatory challenges in relation to the crisis.

The COVID-19 epidemic has created challenges all over the place. In order to support regulators around the world the ADA Chair in financial law (inclusive finance) works with its research partners on a number of papers that analyze regulatory challenges in relation to the crisis. These papers seek to (1) document the respective crisis legislation; (2) assist countries looking for solutions to respond rapidly and efficiently to the crisis; (3) exchange experiences of crisis measures; and (4) spur discussion on the extent to which the crisis legislation can function as a blueprint for general reform.

The first paper titled Digital Finance & the COVID-19 Crisis examines how digital financial infrastructure is being, and can be, leveraged to overcome the immediate challenges presented by the pandemic and manage the impending economic fallout. It finds that the origins of the 2008 Global Financial Crisis and the COVID-19 crisis are different: 2008 was a financial crisis spilling over into the real economy. 2020 is a health and geopolitical crisis, spilling over simultaneously into financial markets and the real economy. As such, this crisis requires different approaches. Yet the world is also a different one today when compared to 2008: more and more digital infrastructure enables people, business and financial institutions to transaction digitally. This first study, at the macro level, seeks to identify areas of systemic risk and strategies and frameworks to support policy coordination and action. At the micro level it seeks to illustrate how digital finance tools may be able to assist addressing some of the challenges emerging, and highlights the difficulties (including digital literacy and digital exclusion). The paper is available for download.

The second paper titled The COVID-19-Crisis and Company Law - Towards Virtual Shareholder Meetings summarizes legislative efforts in some 20 countries to provide developing and developed countries struggling with the crisis a blueprint for fast and efficient crisis response legislation in the field of shareholder participation in listed companies, recapitalization of businesses as well as insolvency and bankruptcy law. While the provisions on recapitalization and insolvency law are destined to be short-lived, given their implications for creditors and shareholders alike, we find that the rules for virtual shareholder participation through virtual shareholder meetings have the potential to stay for good (with details to be worked out). The paper is available for download.

Further crisis-related work at the ADA Chair focuses on a) how to perform e-KYC to allow for greater digital financial inclusion in crisis times, b) the role of cryptocurrencies in battling the crisis, as well as c) regulatory options regarding crisis-related relief on financial institutions’ capital requirements.

Anyone interested in discussing these matters and sharing experiences is encouraged to contact the ADA Chair.