The European Banking Authority (EBA) decided, on Wednesday 2 December, to reactivate, until 31 March 2021 and subject to conditions, its April guidelines on moratoria on bank loan repayments to take account of the “exceptional circumstances” related to the health restrictions arising from the second wave of the Covid-19 pandemic (see EUROPE 12461/14).
“This reactivation will ensure that loans, which had not benefited from a moratorium until now, will now be able to benefit from it”, the EBA said , underlining the role of the banking sector in financing the economy.
Two new conditions are introduced to ensure that support under a moratorium is limited to bridging liquidity shortages: - only loans that are suspended, postponed or reduced under general payment moratoria not more than nine months in total, including previously granted payment holidays, can benefit from the application of the Guidelines; - banks will have to document to their supervisor their plans for assessing that the exposures subject to general payment moratoria do not become unlikely to pay.
In September, the European authority had decided on a gradual extension of its guidelines on moratoria (see EUROPE 12565/23). (Original version in French by Mathieu Bion)