ECB Clarifies AnaCredit Reporting of Loans Under COVID Relief Measures
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.
Related Links
Keywords: Europe, EU, Banking, COVID-19, AnaCredit, Reporting, Loan Moratorium, Credit Risk, Forborne Exposures, Q&A, Loan Guarantee, ECB
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.
Scott Dietz
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
Previous Article
IAIS Publishes Newsletter for March 2020Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.