When financial sectors are buffeted by sudden and dramatic external shocks, regulators strive to implement targeted regulatory responses to mitigate negative impacts — and the shocks made by the pandemic were no exception.
The aim of this policy report is to examine the types of regulatory flexibility adopted in response to the pandemic and provide early evidence on the impact of these measures.
The Purpose of This Report
Based on desk research and interviews and exchanges with regulators and financial service providers (FSPs), this paper aims for the following:
- Describe the main types of regulatory flexibility adopted in developing and emerging economies as a response to the pandemic.
- Provide preliminary evidence of how regulatory flexibility has impacted low-income financial consumers and micro and small enterprises (MSEs), as well as the FSPs that serve them.
- Draw some emerging lessons for regulators seeking to better prepare for the future.
This is the third in a series of policy papers that aims to analyze policy responses to COVID-19 to assess the impact of policies, both in the short- and long-term, on low-income customers of financial services and the financial service providers that work with them.