BNB Extends Loan Moratorium, Maintains CCyB at 0.5% Amid Crisis
BNB announced that it has approved a request of the Association of Banks in Bulgaria to extend the moratorium on payments amid the COVID-19 crisis. Recently, BNB had also announced its decision to comply with the EBA guidelines on reporting and disclosures of exposures subject to measures implemented in response to the COVID-19 crisis. Another announcement from BNB, in the context of the ongoing challenges, is its decision to maintain the countercyclical capital buffer (CCyB) applicable to credit risk exposures in the Republic of Bulgaria to 0.5% for the third quarter of 2020. Given the expected slowdown in economic activity and the associated increase in non-performing loans, which would put pressure on the profitability and capital position of credit institutions, maintaining the CCyB at 0.5% in the third quarter of 2020 will contribute to the sustainability of banking system, according to BNB. The BNB Governing Council will decide on the level of CCyB buffer applicable for the fourth quarter of 2020 in September 2020.
On July 09, 2020, the Governing Council of BNB had decided to comply with the EBA guidelines (GL/2020/08) on legislative and private moratoria on credit payments applied in context of the COVID-19 crisis. These guidelines, which amend the earlier EBA guidelines (GL/2020/02) on this, extend by three months, from June 30, 2020 to September 30, 2020, the deadline for the application of moratorium on payments. In line with this, BNB has approved an extension of the term for submission of a request by clients of the banks for deferral of liabilities and their approval by the banks until September 30, 2020. BNB also extended the deadline for deferral of liabilities of bank customers until March 31, 2021. The extension of the deferral procedure applies to exposures for which no request for deferral of payments has been submitted before June 22, 2020.
In addition, BNB will start publishing monthly aggregated information in connection with the received and approved requests to banks for deferral of liabilities. Information for April, May, and June 2020 will be published on July 31, 2020. For the following months of the approved order, monthly information will be published at the end of the last working day of the month following the reporting period. As reporting and disclosure requirements are in the context of the COVID-19 pandemic, they are expected to be limited in time. The expected period for their application is 18 months.
Related Links (in Bulgarian)
Keywords: Europe, EU, Bulgaria, Banking, CCyB, Basel, COVID-19, Reporting, Credit Risk, Regulatory Capital, Loan Moratorium, EBA, BNB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Related Articles
HM Treasury Publishes Policy Statement Amending Benchmarks Regulation
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies Finalize Rule to Reduce Impact of Large Bank Failures
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies Finalize Rule on Net Stable Funding Ratio Requirements
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.
FSB Sets Out Effective Practices for Cyber Incident Recovery
FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.
ECB Publishes Eleventh Issue of the Macroprudential Bulletin
ECB published eleventh issue of the Macroprudential Bulletin, which provides insight into the ongoing work of ECB in the field of macro-prudential policy.
HM Treasury Seeks Views on Review of Solvency II Regime for Insurers
HM Treasury issued a call for evidence seeking views to reform the prudential regulatory regime—also known as Solvency II—of the insurance sector in UK.
ESRB Responds to EC Consultation on Review of Solvency II
ESRB responded to the EC consultation on review of Solvency II regime.
HM Treasury Consults on Phase II of Future Regulatory Framework Review
HM Treasury launched a consultation on Phase II of the Future Regulatory Framework Review, with the comment period ending on January 19, 2021.
EC Publishes Work Program for 2021
EC adopted the work program for 2021.
