CBM Amends Directive on Loan Moratoria Amid Pandemic
CBM announced that, in view of the impact of COVID-19 pandemic, the Minister for Health, in consultation with the Ministry for Finance, issued Legal Notice 15 on the reactivation of moratoria in Malta. This reactivation allows borrowers to submit their applications for new moratoria or to extend their existing moratoria subject to a number of conditions, before March 31, 2021. In this context, CBM has amended Directive 18 on moratoria on credit facilities in exceptional circumstances. CBM also published a guide on the amendments to the Directive 18, which includes questions and answers to help borrowers understand the options available in their current circumstances.
In light of the differing economic conditions to those prevalent when CBM Directive 18 was originally issued, the application period is being reactivated with targeted conditions, according to which an applicant can benefit either from the extension to an existing moratorium, or a completely new moratorium. Applicants who are applying for moratorium on a loan that was never subject to a moratorium are entitled to a moratorium of up to nine months. However, borrowers who have benefited, or are benefiting, from a moratorium shorter than nine months can apply for an extension so that the duration of their existing moratorium would be extended to cover a moratoria period of no more than nine months in total. Loans already benefiting from a moratorium period of more than nine months will not be eligible for a further extension.
In addition, CBM has amended the Directive No. 8 to establish a new Additional Credit Claims (ACC) framework for individual credit claims granted by credit institutions in Malta that are accredited by the Malta Development Bank under the COVID-19 Government Guarantee Scheme. To this effect, CBM implemented the terms and conditions of the domestic ACC framework as approved by the Governing Council through amendments effected to its Directive No. 8. The amendments to the Directive include CBM’s acceptance of ACC as collateral for Eurosystem monetary policy operations as well as introduction of a new Annex 15 to the Directive, laying down the terms and conditions of the domestic ACC framework. The amendments became applicable from January 01, 2021.
Related Links
- Press Release on Reactivation of Moratoria
- Press Release on Amendments Related to ACC Framework
- Directive on Moratoria on Credit Facilities (PDF)
- Guide on Amendments to Directive on Moratoria on Credit Facilities (PDF)
- Directive No. 8 on Monetary Policy Instruments and Procedures (PDF)
Keywords: Europe, Malta, Banking, COVID-19, Loan Repayment, Loan Moratorium, Credit Risk, Additional Credit Claim, CBM
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
BIS Bulletin Examines Key Elements of Policy Response to Cyber RiskRelated Articles
PRA Letter Sets Out Findings on Reliability of Regulatory Reporting
PRA published a "Dear CEO" letter that sets out findings of a review on the reliability of regulatory reporting and reiterates the supervisory expectations on regulatory reporting.
APRA Connect to Go Live; APRA to Reduce Reliance on CLF
The Australian Prudential Regulation Authority (APRA) confirmed that its new data collection solution APRA Connect will go live on September 13, 2021.
FED Paper Explores Fintech Partnership Dynamics in Community Banks
The Federal Reserve System (FED) published a paper describing the landscape of partnerships between community banks and fintech companies.
FDIC Selects Four Vendors for Next Phase of Rapid Prototyping Pilot
The Federal Deposit Insurance Corporation (FDIC) has chosen four companies—Novantas Inc, Palantir Technologies Inc, PeerIQ, and S&P Global Market Intelligence LLC—to propose a pilot consisting of testing new reporting and analytical tools with a small group of FDIC-supervised institutions on a voluntary basis.
PRA Consults on Requirements to Identify Material Risk-Takers
The Prudential Regulatory Authority (PRA), via the consultation paper CP18/21, proposed changes to the applicable requirements on the identification of material risk-takers for the purposes of the remuneration regime.
ESA Report Points to Elevated Credit and Cyber Risks in Wake of Crisis
The Joint Committee of European Supervisory Authorities (ESAs) published its second 2021 joint risk assessment report for the financial sector.
IOSCO on Compliance of Credit-Sensitive Rate with Benchmark Principles
The International Organization of Securities Commissions (IOSCO) published a statement reiterating the importance of continued transition to robust alternative financial benchmarks—that is, risk-free rates—to mitigate potential risks arising from the cessation of LIBOR, including the USD LIBOR.
FED Proposes Revisions to FR Y-9 Reports
The Board of Governors of the Federal Reserve System (FED) proposed revisions and three-year extension of the FRY-9 reports on financial statements for holding companies (OMB Control Number 7100-0128).
SRB Chair Discusses Improving Resolution Framework for Mid-Size Banks
The Single Resolution Board (SRB) Chair, Elke König, published an article on improving the resolution framework for medium-size banks.
ACPR Issues Update on Reporting with Legal Entity Identifier
The French Prudential Control and Resolution Authority (ACPR) announced that the testing environment for the ACPR information system and the OneGate portal will be available to receive test reports with the Legal Entity Identifier (LEI) from September 08, 2021.
