The European Mortgage Federation-European Covered Bond Council (EMF-ECBC) expects by mid-April to have a task force in place to address the challenges posed by the Covid-19 pandemic, as stakeholders grapple with the implications of the economic impact of the crisis and policy responses.

The industry body decided to establish the task force on Covid-19 during an emergency virtual meeting yesterday (Thursday) of the boards of both its EMF and ECBC sections.

Luca Bertalot, EMF-ECBC secretary general, told The CBR it had already been busy in its role as a think-tank for the industry in fielding enquiries from the authorities regarding the consequences of measures such as debt moratoria on covered bonds. In an initial response to the growing crisis, the EMF-ECBC had written to the European Commission offering its support in such tasks and further in the future economic recovery.

“What we want here is to have a kind of industry brain,” said Bertalot, “able to digest and analyse all the information, and to propose solutions for the future.”

The task force is therefore being established to address both short and medium-to-long term issues:

a short term horizon where the task force is mandated to monitor and share information

a medium-to-long term horizon where the task force will be mandated to elaborate the information collected over the short term and seek to propose a common way forward

In relation to the first phase, member personnel from both the EMF and ECBC sides of the industry body, reflecting the retail and funding sides of the mortgage business, as well as investment bank and rating agency representatives will collate update on a weekly basis information relevant information on regulatory, governmental and other initiatives affecting the industry. The task force line-up is expected to be finalised by 15 April.

The second phase, according to Bertalot, will look at how the future recovery can be supported.

“We all expect a very important hit in terms of GDP,” he says, “so we, as capital markets representatives, can offer some kind of ammunition that can help the European Union move forward. We of course have covered bonds that can help the public sector side and residential and commercial mortgages, but then the ESN could also be an instrument for SMEs, and Energy Efficient Mortgages can play a role.

“At the end of the day, we have some 2,000 financial institutions in the EMF-ECBC family, so we can really be the link between the European institutions and the market, and ensure proper communication in this phase.”