Featured Product

    CBM Amends Directive on Borrower-Based Measures to Ease COVID Impact

    June 01, 2020

    In the context of the ongoing COVID-19 pandemic, CBM issued a notice to amend Directive 16 on borrower-based measures. Directive 16 sets limits on the Loan-to-Value at origination, Debt-Service-to-Income at origination, and term to maturity for Residential Real Estate loans. CBM also announced that it is implementing the ECB guideline (ECB/2020/29) on additional temporary measures for Eurosystem refinancing operations and eligibility of collateral in full via amendments to the MNB Directive 8 on monetary policy instruments and procedures. Directive 8 is being amended in relation to the admission of certain marketable assets and issuers eligible on April 07, 2020, the new valuation haircut levels applied to asset-backed securities, and the new valuation haircut levels applied to marketable assets, other than asset-backed securities. The amendments to Directive 8 became applicable from May 18, 2020.

    CBM recognizes that the outbreak of COVID-19 has caused serious disruptions in economic activity, including in the real estate market. CBM also acknowledges the temporary distortions in the borrower’s ability to adhere to the limits sets in Directive 16, especially in cases where it could be established that the loss of income is temporary. Against this background, CBM is announcing the following measures:

    • Directive 16 specifies that those who wanted to buy a second property (Category II buyers) with financing from credit institutions would have to make a at least 15% down payment until June 30, 2020. The down payment requirement was due to increase to 25% from July 01, 2020 but this increase is now being postponed by a year, to July 01, 2021. The one-year extension is being implemented to provide the necessary relief to prospective borrowers that are granted a residential real estate loan.
    • CBM also temporarily eased restrictions on the maximum extent of the permitted repayment burden by borrowers, set at 40% in the Directive. The limit is being relaxed for a period of six months, provided that the borrower can demonstrate that the exceeding of this limit is temporary.

     The amended measures in Directive 16 are to come into effect from the date of publication of the Notice on these amendments and may be extended if CBM assesses that it is appropriate to do so.

     

    Related Links

    Keywords: Europe, Malta, Banking, COVID-19, Residential Real Estate, LTV, DSTI, Credit Risk, CBM

    Featured Experts
    Related Articles
    News

    APRA Issues Interim Update to Policy Priorities for 2021 and Beyond

    In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.

    September 24, 2021 WebPage Regulatory News
    News

    EC Adopts Solvency II and Resolution Rules Package for Insurers

    The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.

    September 22, 2021 WebPage Regulatory News
    News

    OCC Issues Booklets on Regulatory Reporting and Earnings

    The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.

    September 22, 2021 WebPage Regulatory News
    News

    ECB Sets Out Results of Economy-Wide Climate Stress Tests

    The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.

    September 22, 2021 WebPage Regulatory News
    News

    EBA Examines Implications of Increasing Use of Digital Platforms in EU

    The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.

    September 21, 2021 WebPage Regulatory News
    News

    HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact

    The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.

    September 21, 2021 WebPage Regulatory News
    News

    ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures

    The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.

    September 21, 2021 WebPage Regulatory News
    News

    BIS Quarterly Review Discusses Developments in Fintech and ESG Space

    BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.

    September 20, 2021 WebPage Regulatory News
    News

    BCBS to Consult on Supervisory Practices for Climate Risks by Year-End

    The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards

    September 20, 2021 WebPage Regulatory News
    News

    OCC Identifies Operational Risk Deficiencies in MUFG Union Bank

    The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.

    September 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7494