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Message: <blockquote data-quote="Jiraiya" data-source="post: 26396" data-attributes="member: 4295">Here's this week article. Hope everyone is staying safe under the current situation. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite1" alt=":)" title="Smile    :)" loading="lazy" data-shortname=":)" />Central banks’ responses to Covid-19 By [USER=1308]@Brian[/USER] ChiuThe StoryInvestors tend to see the world as an alternation between prosperity and ruin.As the coronavirus rages, the massive disruption to global businesses fuels market fear of a recession.Dow Jones Industrial Average, a leading market index indicative of American and global economic outlook, has tumbled more than 20% from its peak last week. The panicky sell-off marks an end to the 11 years of positive momentum of the market. Some US stocks even recorded the largest one-day drop since the 1987 crash.To cushion the coronavirus’ economic impact, the Federal Reserves and Bank of England made an emergency cut in interest rates. (For an excellent introduction on interest rate, see <a href="https://thecorporatelawacademy.com/forum/threads/the-impact-of-interest-rates-on-law-firms-part-1.32/" target="_blank">@Jaysen Sutton’s article</a>) Since the eurozone has long been in the negative interest territory, the European Central bank opts for other monetary measures to follow suit.Impact on Businesses and Law FirmsJust as prompt actions are required to contain the spread of coronavirus, these economic responses will be critical to encourage lending and boost market confidence.Due to the abnormal and sudden nature of the coronavirus, small and medium businesses(SME) could lack enough cashflow to weather through the drastic drop in demand, potentially triggering a wave of insolvencies and job cuts. With a lower borrowing cost, businesses are encouraged to take on loans until the public fear subsides.Business analysts stress the need for lenders to show forbearances on loan repayment too.This is easier in China as banks are state-owned. In the West, banks are private entities and unwilling to take on more credit risks. This is when the UK Budget(For details, See [USER=294]@Rachel[/USER] Strickland’s article below), an unprecedented stimulus package, becomes vital. Combined with the interest rate cut, it intends to prop up investors’ and financial institutions’ confidence and to stabilise stock markets.Law firms as businesses are heavily influenced by interest rate cuts as it generally means a quieter market but insolvency and litigations lawyers may benefit.The cost of COVID-19 on English football By@Curtley BaleThe StoryThe outbreak of the Coronavirus has caused not only widespread hysteria and panic; it has also led to a curtailing of sport across the globe. English football has been suspended for a minimum period of two weeks whilst clubs and health officials get together to decide on how best to proceed. The business impact of this may be that the Premier League cannot fulfil its contractual obligations to the broadcasters. This is set to land the footballing body a fine of around £750m.Impact on Businesses and Law FirmsThe Premier League (PL) as a business will be adversely affected if it has to pay a fine of nearly £1bn. The PL has contracts worth £3.6bn and £885m with Sky and BT Sports respectively. The deal spans until 2022 and includes an unprecedented number of live games. Breaching their contracts may see a financial penalty for the PL. This costly litigation suit will hurt financially, but it may also weaken their bargaining power for future deals. In house counsel and external advisers are already combing through the terms of the contracts. It is said that the broadcasters are feeling the pressure from customers who are paying for live sport. To this end, Sky has agreed to allow customers to ‘pause’ their subscriptions.Clubs outside of England’s top flight are facing serious plight. Most clubs run as small businesses with owner’s funding the football club from their other business ventures. The English Football League relies on a TV package deal of only £595m, compared to the giant figures in the Premier League. This means that clubs cannot pay staff, rent or utility bills without revenue from football. Clubs such as Barnet have already made non-playing staff redundant. It is likely the COVID-19 outbreak will lead to heavy restructuring for football clubs as well as potential re-financing. Whilst the virus may have stopped football in its tracks, it looks set to entertain a wide range of lawyers.</blockquote>

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