ECB published one question and answer (Q&A) offering clarification on certain aspects of AnaCredit reporting in light of the regulatory developments during the COVID-19 crisis. ECB points out that loans covered by COVID-19 relief measures are subject to the same requirements as any other instrument that is reported to AnaCredit. Consequently, reporting agents should continue to comply with the existing requirements set out in the AnaCredit Regulation and take note of the clarifications provided in the AnaCredit Reporting Manual.
Instruments that are reportable to AnaCredit may be the subject of COVID-19 relief measures. The most common measures include public guarantees and legislative and non-legislative (private) debt moratoria, although some types of measure may not exist in all countries. Other forms of support measure include the option for individual debtors to ask their credit institutions to reschedule payment obligations as a result of the COVID-19 crisis; restrictions imposed by governments on credit institutions’ ability to revoke credit lines during the COVID-19 pandemic; the automatic extension of certain protections in line with the postponement of loan repayments; subsidized loan programs; and loan programs with government guarantees covering some or all of the credit risk. While there is no specific guidance regarding the reporting of loans covered by COVID-19 relief measures, some of the measures applied to such loans do have an impact on data that are subject to AnaCredit reporting; therefore, ECB has provided additional guidance to facilitate consistent and harmonized reporting. The ECB clarifications seek to ensure the consistency and comparability of risk metrics across all reporting agents, since monitoring of the provision of credit and credit risk is especially important in the context of the current crisis.
With respect to the loans subject to debt moratoria, reporting agents need to think carefully about the data attributes that are affected by the application of a debt moratorium and should consistently follow the instructions for AnaCredit reporting. The ECB clarification outlines a number of considerations that are important with regard to the identification of renegotiated loans, forborne exposures, and loans in default. Moreover, ECB sets out that its clarifications should be interpreted keeping in mind that AnaCredit is aligned with the EBA implementing technical standards on the identification of forborne instruments and defaulted instruments and counterparties and the corresponding guidelines. With respect to the loans covered by public or government guarantees offered in response to the COVID-19 crisis, reporting agents should continue to fulfill the requirements set out in Sections 8 and 9 of Part II of the AnaCredit Reporting Manual in respect of the reporting of protection to AnaCredit. Thus, there are no special requirements in relation to loans covered by public guarantees. All public guarantees (that is, guarantees securing reportable loans) and collateral that are offered to reporting agents in response to the COVID-19 pandemic should be reported to AnaCredit as credit risk mitigants as soon as they are provided to the institution in question. The “date of original protection value” should be the date as of which the bank regards the protection as securing the loan.
Keywords: Europe, EU, Banking, COVID-19, AnaCredit, Reporting, Loan Moratorium, Credit Risk, Forborne Exposures, Q&A, Loan Guarantee, ECB
Previous ArticleEBA Single Rulebook Q&A: Second Update for May 2020
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.
FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.