EBA to gradually stop loan repayments guidelines

Tuesday 22 September 2020 12:49 CET | News

The European Banking Authority (EBA) has made plans to phase out its Guidelines on legislative and non-legislative payment moratoria in accordance with its end of September 2020 deadline.  

These Guidelines, which were published in the early phases of the COVID-19 pandemic, have provided the necessary flexibility as well as certainty on the regulatory framework, in light of significant number of actions taken by banks to support their customers as lockdown measures were put in place. The continued ability for banks to provide lending is of key importance and the EBA will keep monitoring the situation as needed.

The payment moratoria have been an effective tool to address short-term liquidity challenges caused by the COVID-19 pandemic. The EBA guidelines helped banks to manage the large amounts of requests from customers wishing to participate in such schemes. However, the EBA does not consider adequate at this state the further extension of such an exceptional measure. It is opportune to return to the practice that any rescheduling of loans should follow a case-by-case approach, according to the EBA statement. 
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Keywords: EBA, Europe, legislative loan repayments, non-legislative loan repayments, guidelines, payment moratoria, European Banking Authority, COVID-19, pandemic, regulatory framework, banks, loans
Categories: Banking & Fintech
Countries: Europe
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Banking & Fintech

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