Regulatory Alerts2020-03-13
Added · Updated
Circular to credit and financial institutions on the EBA’s clarity on the application of the prudential framework in light of coronavirus (COVID-19) measures
The Malta Financial Services Authority brings to the attention of credit and financial institutions an EBA statement clarifying the application of the prudential framework regarding default classification, foreborne exposures, and IFRS9 accounting treatment in light of COVID-19 measures. The EBA clarifies that generalized payment delays do not automatically lead to classification in default, forborne status, or unlikeliness to pay, requiring individual assessments of borrowers' credit standing. Institutions are required to ensure full information disclosure, highlight potential changes or costs, and ensure temporary measures do not have an automatic adverse impact on customer credit ratings. Additionally, the EBA has decided to delay deadlines for ongoing public consultations by two months and extend remittance dates for funding plans data and the Quantitative Impact Study based on December 2019 data.
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