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At a glance
A large number of legacy non-performing loan exposures (NPLs) continue to subsist on the balance sheets of banks. Portfolios of NPLs tie up huge amounts of regulatory capital which, in turn, limits the amount of capital that banks have available to lend to the real economy. The economic
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On 2 April 2020, the European Banking Authority (EBA) published guidelines on legislative and non-legislative moratoria on loan repayments in light of COVID-19 (EBA/GL/2020/2) (the Guidelines). The Guidelines were updated by a supplementary supervisory statement addressing the treatment of securitised exposures subject to payment moratoria, issued on 22 April 2020.
The supplementary supervisory statement addressing securitised exposures establish where legislative and non-legislative moratoria should not trigger default or forbearance classifications for regulatory capital purposes and where actions taken under payment moratoria will not be considered a breach of the prohibition of ‘implicit support’.
Continue Reading EBA publishes additional supervisory measures on legislative and non-legislative moratoria on loan repayments in light of COVID-19