Featured Product

    EC Approves Italian State Guarantee Scheme in Context of COVID-19

    March 25, 2020

    EC approved the Italian State guarantee supporting a debt moratorium from banks to small and medium-size enterprises (SMEs) affected by the COVID-19. The scheme was approved under the State aid Temporary Framework, adopted by EC on March 19, 2020, to enable member states to use the full flexibility foreseen under State aid rules to support the economy in the context of the COVID-19 outbreak. The Temporary Framework will be in place until the end of December 2020. Italy notified to EC under the Temporary Framework a State guarantee to support a debt moratorium for SMEs, which includes the postponement of repayments of overdraft facilities, bank advances, bullet loans, mortgages, and leasing operations.

    EC found that the Italian measure is in line with the conditions set out in the Temporary Framework. In particular, the guarantee covers a well-defined set of financial exposures and is limited in time. The scheme runs until September 30, 2020 and the guarantee extends for 18 months after the end of the moratorium. Furthermore, the guarantee covers the payment obligations falling under the moratorium. The risk taken by the State is limited to 33%. In any case, before calling on the State guarantee, financial intermediaries must make recovery efforts themselves. To ensure that the measure benefits only SMEs, who experience difficulties due to the COVID-19 outbreak, eligible beneficiaries must not have non-performing exposures prior to March 17, 2020. They also need to certify that their business activity has suffered due to the economic effects of the COVID-19 outbreak. 

    EC concluded that the guarantee to provide liquidity for SMEs under the moratorium will contribute to managing the economic impact of the COVID-19 outbreak in Italy. The measures are necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) Treaty on the Functioning of the European Union and the conditions set out in the Temporary Framework. On this basis, EC approved the measures under EU State aid rules.

     

    Related Links

    Keywords: Europe, EU, Italy, Banking, COVID-19, SME, State Aid Rules, Temporary Framework, Credit Risk, EC

    Featured Experts
    Related Articles
    News

    BoE Seeks Information Before Migrating Statistical Reporting to BEEDS

    The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.

    October 25, 2021 WebPage Regulatory News
    News

    FCA Publishes Final Rules on Investment Firms Prudential Regime

    The Financial Conduct Authority (FCA) published the final rules on the Investment Firms Prudential Regime (IFPR) to streamline and simplify the prudential requirements for solo-regulated UK firms authorized under the Markets in Financial Instruments Directive (MiFID).

    October 25, 2021 WebPage Regulatory News
    News

    CFRF Publishes Guides to Manage Financial Risks from Climate Change

    The working groups of the Climate Financial Risk Forum (CFRF) published a second round of guides (or Session 2 guides), written by the industry for the industry, to help financial firms manage climate-related financial risks.

    October 21, 2021 WebPage Regulatory News
    News

    PRA Finalizes Policy for Non-Performing Exposure Securitizations

    The Prudential Regulation Authority (PRA) published the final Policy Statement PS24/21 that contains the new Non-Performing Exposures Securitization Part of the PRA Rulebook and an updated Supervisory Statement SS10/18 on the general requirements and capital framework with respect to securitizations.

    October 21, 2021 WebPage Regulatory News
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    EU to Explore Potential of Establishing a Joint Cyber Unit

    The European Council adopted conclusions inviting the European Union (EU) and the member states to further develop the cybersecurity crisis management framework.

    October 19, 2021 WebPage Regulatory News
    News

    EC Sets Out Work Program for 2022

    The European Commission (EC) adopted the work program for 2022.

    October 19, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7598