Relief and rescue: financial regulatory suspensions in the United Kingdom

The outbreak of the COVID-19 pandemic severely impacted economic activity as governments imposed lockdowns in many countries. Besides public finance packages for emergency help, such as furloughing, policymakers have turned to private sector finance to alleviate the financial stresses and hardships caused to households and corporations. In other words, private sector finance is being relied on, to a significant extent, but not exclusively, to meet the policy goals of “relief and “rescue” for households and corporations. In the UK, the PRA and FCA suspended the application of certain regulatory laws and private contractual obligations applicable to their regulated entities. Regulatory suspensions may, at first blush, be regarded as temporary. However, we argue that more permanent institutional change may occur, based on the theoretical positioning of regulatory suspensions within Pistor's legal theory of finance. It is imperative to explore the nature of regulatory suspensions within the framework of legal elasticity so regulators can perceive more fully the implications of their deployment. This will help mitigate the unintended and adverse consequences that regulatory suspensions may entail, which could ultimately undermine the public policy goals of relief and rescue.