Featured Product

    CBM Amends Directive on Borrower-Based Measures to Ease COVID Impact

    June 01, 2020

    In the context of the ongoing COVID-19 pandemic, CBM issued a notice to amend Directive 16 on borrower-based measures. Directive 16 sets limits on the Loan-to-Value at origination, Debt-Service-to-Income at origination, and term to maturity for Residential Real Estate loans. CBM also announced that it is implementing the ECB guideline (ECB/2020/29) on additional temporary measures for Eurosystem refinancing operations and eligibility of collateral in full via amendments to the MNB Directive 8 on monetary policy instruments and procedures. Directive 8 is being amended in relation to the admission of certain marketable assets and issuers eligible on April 07, 2020, the new valuation haircut levels applied to asset-backed securities, and the new valuation haircut levels applied to marketable assets, other than asset-backed securities. The amendments to Directive 8 became applicable from May 18, 2020.

    CBM recognizes that the outbreak of COVID-19 has caused serious disruptions in economic activity, including in the real estate market. CBM also acknowledges the temporary distortions in the borrower’s ability to adhere to the limits sets in Directive 16, especially in cases where it could be established that the loss of income is temporary. Against this background, CBM is announcing the following measures:

    • Directive 16 specifies that those who wanted to buy a second property (Category II buyers) with financing from credit institutions would have to make a at least 15% down payment until June 30, 2020. The down payment requirement was due to increase to 25% from July 01, 2020 but this increase is now being postponed by a year, to July 01, 2021. The one-year extension is being implemented to provide the necessary relief to prospective borrowers that are granted a residential real estate loan.
    • CBM also temporarily eased restrictions on the maximum extent of the permitted repayment burden by borrowers, set at 40% in the Directive. The limit is being relaxed for a period of six months, provided that the borrower can demonstrate that the exceeding of this limit is temporary.

     The amended measures in Directive 16 are to come into effect from the date of publication of the Notice on these amendments and may be extended if CBM assesses that it is appropriate to do so.

     

    Related Links

    Keywords: Europe, Malta, Banking, COVID-19, Residential Real Estate, LTV, DSTI, Credit Risk, CBM

    Featured Experts
    Related Articles
    News

    EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA

    The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.

    May 11, 2022 WebPage Regulatory News
    News

    EC Mandates ESAs to Propose Amendments to SFDR Technical Standards

    The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.

    May 11, 2022 WebPage Regulatory News
    News

    EBA Examines Supervisory Practices, Issues Deposits Reporting Template

    The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),

    May 11, 2022 WebPage Regulatory News
    News

    US Agency Publications Address Basel, Reporting, and CECL Developments

    The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances

    May 09, 2022 WebPage Regulatory News
    News

    SEC Extends Comment Period on Climate Risk Disclosures

    The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.

    May 09, 2022 WebPage Regulatory News
    News

    APRA Reduces Committed Liquidity Facility, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.

    May 09, 2022 WebPage Regulatory News
    News

    CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks

    The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.

    May 06, 2022 WebPage Regulatory News
    News

    PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down

    The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.

    May 06, 2022 WebPage Regulatory News
    News

    EBA Updates Standards for 2023 Benchmarking of Internal Approaches

    The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.

    May 06, 2022 WebPage Regulatory News
    News

    EIOPA Responds to Stakeholder Views on Blockchain in Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.

    May 06, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8179