Regulatory Flexibility During the Pandemic: Emerging Lessons

This policy report examines the types of regulatory flexibility adopted in response to COVID-19 and provides early evidence on the impact of these measures.

View report

AUTHORS

Denise Dias, Loretta Michaels

Topics

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.

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 paper 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.

This work was conducted in partnership with GIZ.

Loretta Michaels

Independent Consultant

Loretta Michaels is an independent consultant with a focus on policy strategy around digital financial inclusion. She works closely with the World Bank/IFC, the Consultative Group to Assist the Poor (CGAP) and the Better Than Cash Alliance (BTCA), amongst others, and has supported the Global Partnership for Financial Inclusion (GPFI) since 2014. Previously, she was the Senior Policy Advisor for Financial Inclusion for the US Treasury, where she was the subject matter expert on technology-enabled financial inclusion, working with officials across the US government to promote enabling policy environments and capacity building programs in low-income countries. Prior to becoming an independent consultant, Loretta served in a number of management positions in the telecommunications industry, leading the development of new venture initiatives worldwide. She also managed the Telecoms & IT consulting unit at Cap Gemini Ernst & Young.

Denise Dias

Consultant, Financial Regulation and Supervision

Denise specializes in prudential and market conduct financial regulation and supervision with a focus on digital finance and payments. She has over 16 years of experience with policy, regulation, and supervision, and has acted as a bank examiner in the Central Bank of Brazil (prudential and market conduct). She has also founded and managed an internet marketing business in Brazil, and audited government programs for the Brazilian Ministry of Finance. In addition to CFI, the World Bank, CGAP, GIZ, and Bankable Frontier, and the Toronto Centre are organizations with whom she has worked. Denise holds an MBA in international banking and finance, an MBA in financial sector economics, and a bachelor’s degree in business. She speaks Portuguese and Spanish.