BaFin Explains Regulatory Measures to Address Impact of COVID-19
BaFin has released new developments and important information about COVID-19 and its effects on the financial and banking system. In addition, BaFin published frequently asked questions regarding banking and securities supervision. The answers to FAQs provide clarifications on topics related to credit risk, governance, FINREP, IFRS 9, Capital Requirements Regulation/Directive (CRR 2/CRD 5), liquidity risk, and reporting system. For certain reports, in particular those based on the FinaRisikoV (ordinance for the submission of financial and risk-bearing capacity information according to the German Banking Act) and the million credit reporting system, BaFin and Deutsche Bundesbank will not take up late submissions from the banking authorities and will allow an additional modified submission method for master data reports for large and million credit reporting systems.
BaFin has adopted a large number of measures to increase the scope for lending and, if necessary, absorb losses. Against this background and in view of the high degree of uncertainty about future developments, BaFin recommends refraining from buying back shares and carefully weighing dividends, profits, and bonuses. BaFin also advises to apply the transition rules to the IFRS 9 accounting standard. In the case of corona-related payment delays, a "through the cycle" perspective should be taken, which also takes into account state measures to mitigate the economic consequences. The dialog with the accounting standard-setters on these issues will continue at the national and international levels.
Related Links (in German)
Keywords: Europe, Germany, Banking, Securities, COVID-19, Reporting, Credit Risk, IFRS 9, FAQ, FINREP, Governance, CRR2, CRD5, Liquidity Risk, Bundesbank, BaFin
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.
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