European Banking Authority Guidelines on Treatment of COVID-19 Payments Moratoria04/02/2020The European Banking Authority has published guidelines on legislative and non-legislative moratoria on loan repayments applied in light of the COVID-19 crisis. The Guidelines state that, where payment moratoria are based on national law or a private-sector initiative broadly applied by credit institutions in response to COVID-19, they will not be classified as forbearance or distressed restructuring measures. In particular, the Guidelines cover:
(i) the criteria that payment moratoria have to fulfil not to trigger forbearance classification (including that they were launched in response to the COVID-19 pandemic, that they apply to a wide range of obligors and that they only change the schedule of payments of the loan);
(ii) the application of the prudential requirements in the context of those moratoria; and
(iii) the consistent treatment of such measures in the calculation of own funds requirements.
The Guidelines apply to moratoria applied before June 30, 2020, although the EBA may extend the time limit in due course.
View the EBA's Guidelines on the treatment of COVID-19 payments moratoria.
Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center.
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