Featured Product

    EC Outlines Best Practices for Implementing COVID Relief Measures

    July 14, 2020

    EC published a list of best practices agreed by the financial sector, and consumer and business organizations, to help further mitigate the impact of the COVID-19 pandemic. These best practices relate to the relief measures in the context of the COVID-19 crisis and concretely set out the ways in which different market participants can support citizens and businesses throughout the crisis. The best practices cover several issues such as payment moratoria for consumer and business loans and for insurance contributions, facilitation of safer cashless payments, ensuring "swift" provision of loans aimed at mitigating the impact of pandemic, and quick processing and payout of legitimate insurance claims. The published best practices are intended for insurers and for bank and non-bank lending to consumers and businesses.

    The best practices encourage banks and non-bank lenders to demonstrate flexibility toward their business clients experiencing financial difficulties in the context of COVID-19 crisis. Banks and non-bank lenders should endeavor to provide a fast and easy procedure for granting the deferral and the moratoria (online where possible). Banks and non-bank lenders are encouraged to ensure that no excessive fees or interest rates are charged for the special loans, beyond what can be considered a fair fee and fair interest rate, reflecting market conditions and credit risk assessment. For a more streamlined process of granting loans under the public or private guarantee scheme, banks and non-bank lenders are encouraged to contribute to the optimal use of these schemes as follows:

    • Work closely with the national and regional guarantee institutions as well as the government bodies to ensure that the potential clients are well-informed about the government requirements and any inconsistencies are flagged early
    • Ensure that the credit secured by the public guarantee granted to businesses follows as much as possible the conditions set out in the scheme, taking into account the bank’s duties under the scheme and its compliance with supervisory requirements
    • Work with borrowers to seek a solution in individual cases of requests for information or redress with the use of mechanisms such as ombudsman, where they exist.

    This list of best practices follows two roundtable meetings facilitated by EC with consumer and business representatives, European banks, other lenders, and the insurance sector. The discussions involved participation from over 25 organizations and are part of a wider effort by EC to increase lending to the real economy, including a banking package that was adopted in April 2020 in response to the COVID-19 pandemic. While recognizing that there may be limits set by competition law and prudential regulations for the private sector to provide certain relief measures, participants in the meeting agreed to make the necessary effort to inform and encourage their members to implement, whenever appropriate, on a best-efforts basis, these best practices. These practices should be temporary and applied as long as they are still relevant depending on the situation in member states. EC will facilitate a further roundtable in September to take stock of progress and will continue the dialog with stakeholders to support lending during the recovery. All participants are encouraged to follow these best practices.

     

    Related Links

    Keywords: Europe, EU, Banking, Insurance, COVID-19, Loan Moratorium, Credit Risk, Payment Deferrals, Insurance Claims, Loan Guarantee, EC

    Featured Experts
    Related Articles
    News

    EC Adopts Financial Reporting Changes Arising from Benchmark Reforms

    EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.

    January 14, 2021 WebPage Regulatory News
    News

    BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk

    BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.

    January 14, 2021 WebPage Regulatory News
    News

    HMT Updates List of Post-Brexit Equivalence Decisions in UK

    HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Issues Erratum for Technical Package on Reporting Framework 3.0

    EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.

    January 14, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets

    APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for Third Quarter of 2020

    EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro

    ECB concluded the public consultation on the introduction of a digital euro in EU.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Finalizes Guide on Supervisory Approach to Bank Consolidation

    ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.

    January 12, 2021 WebPage Regulatory News
    News

    SRB Chair Outlines Work Priorities for 2021

    The SRB Chair Elke König published an article setting out work priorities for 2021.

    January 11, 2021 WebPage Regulatory News
    News

    FDIC Selects Companies to Compete in Final Phase of Tech Sprint

    FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.

    January 11, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6417