BNB Extends Loan Moratorium, Maintains CCyB at 0.5% Amid Crisis
BNB announced that it has approved a request of the Association of Banks in Bulgaria to extend the moratorium on payments amid the COVID-19 crisis. Recently, BNB had also announced its decision to comply with the EBA guidelines on reporting and disclosures of exposures subject to measures implemented in response to the COVID-19 crisis. Another announcement from BNB, in the context of the ongoing challenges, is its decision to maintain the countercyclical capital buffer (CCyB) applicable to credit risk exposures in the Republic of Bulgaria to 0.5% for the third quarter of 2020. Given the expected slowdown in economic activity and the associated increase in non-performing loans, which would put pressure on the profitability and capital position of credit institutions, maintaining the CCyB at 0.5% in the third quarter of 2020 will contribute to the sustainability of banking system, according to BNB. The BNB Governing Council will decide on the level of CCyB buffer applicable for the fourth quarter of 2020 in September 2020.
On July 09, 2020, the Governing Council of BNB had decided to comply with the EBA guidelines (GL/2020/08) on legislative and private moratoria on credit payments applied in context of the COVID-19 crisis. These guidelines, which amend the earlier EBA guidelines (GL/2020/02) on this, extend by three months, from June 30, 2020 to September 30, 2020, the deadline for the application of moratorium on payments. In line with this, BNB has approved an extension of the term for submission of a request by clients of the banks for deferral of liabilities and their approval by the banks until September 30, 2020. BNB also extended the deadline for deferral of liabilities of bank customers until March 31, 2021. The extension of the deferral procedure applies to exposures for which no request for deferral of payments has been submitted before June 22, 2020.
In addition, BNB will start publishing monthly aggregated information in connection with the received and approved requests to banks for deferral of liabilities. Information for April, May, and June 2020 will be published on July 31, 2020. For the following months of the approved order, monthly information will be published at the end of the last working day of the month following the reporting period. As reporting and disclosure requirements are in the context of the COVID-19 pandemic, they are expected to be limited in time. The expected period for their application is 18 months.
Related Links (in Bulgarian)
Keywords: Europe, EU, Bulgaria, Banking, CCyB, Basel, COVID-19, Reporting, Credit Risk, Regulatory Capital, Loan Moratorium, EBA, BNB
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.
Nick Jessop
Scenario modeling expert; risk management specialist; quantitative financial modeler
Related 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.
