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
Previous Article
BIS Bulletin Examines Key Elements of Policy Response to Cyber RiskRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
