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Explanations for gray doses

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Explanations for gray doses

It seems that not only the Cypriot banks but also the other European banks had questions about how the extension of the loan moratoriums would apply. The series of clarifying questions received by the European Banking Authority yesterday resulted in additional clarifications on the implementation of the prudential framework, in response to questions raised by the COVID-19 pandemic and the problems it causes. EBA may give the green light for an extension until the end of March 2021, but its restrictions will put thousands of borrowers affected by the pandemic crisis out of the moratorium, despite the fact that their income returns to regularity and the possibility of repaying their obligations is not yet visible.

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Yesterday, the EDF provided, inter alia, clarifications on the operation of the 9-month ceiling, which limits the period for which payments on a particular loan can be suspended, postponed or reduced, as a result of the implementation ( and re-implementation) of the general payment moratorium. The clarifications explain how banks should apply the moratorium guidelines when assessing the classification of tolerance and how to determine if there is a reduced financial liability in relation to the loan suspension exceeding the 9-month limit.

The updated report covers the handling of loans and advances subject to a moratorium. In particular, it clarifies that when a moratorium expires, loans and advances subject to this measure must be reported. The EBA also asks credit institutions to substantiate their plans, to assess whether or not exposures subject to general payment restrictions can be paid, ie calls on banks to thoroughly evaluate their loan portfolios to ensure that loans that are on “ice” and are difficult to service normally, will fall into the “unlike to pay” category.

Theano Thiopoulou

Source: www.philenews.com

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