NBB Issues Recommendations for Banks and Insurers to Ease COVID Impact
In response to the COVID-19 pandemic, NBB issued a communication for credit institutions (NBB_2020_33) announcing that it has extended, until January 01, 2021, its previous recommendations to suspend the dividend payments. NBB also recommended insurers and reinsurers to suspend the dividend payments until January 01, 2021. To implement the ESRB recommendations for insurers, NBB will make the necessary amendments to Circular NBB_2020_12. These recommendations are in line with the ESRB recommendation (ESRB/2020/07) of May 27, 2020. NBB also published a set of questions and answers (Q&A), for credit institutions, on moratorium and guarantee schemes in response to the COVID-19 crisis.
Additionally, NBB recommends financial institutions to maintain a prudent and conservative attitude toward variable remuneration and profit sharing. EBA had published a statement on dividends distribution, share buybacks, and variable remuneration on March 31, 2020. In line with the EBA statement, NBB requires that the recommendations for moderation in remuneration policy be respected and that the existing expected impact of this crisis on the institution be taken into account in determining the 2020 remuneration schemes (to be paid out in 2021). In this context, NBB reminds institutions that assessment of the appropriateness of remuneration policy is also a part of the Supervisory Review and Evaluation Process (SREP) exercise.
Related Links
Keywords: Europe, Belgium, Banking, Insurance, COVID-19, Dividend Distribution, Remuneration, Share Buybacks, Q&A, Moratorium, Guarantee Guarantee Scheme, ESAs, ESRB, NBB, ECB
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
EBA Issues Updates on Stress Test Exercise for Banks in EURelated Articles
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.
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.
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.
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),
SNB Updates NSFR Forms and FINMA Consults on Operational Risk Circular
The Swiss National Bank (SNB) published Version 1.2 of the reporting forms (NSFR_G and NSFR_P) on the net stable funding ratio (NSFR) of banks, along with the associated documentation.
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
