Banking and finance regulatory news, December 2020

COVID-19: LSB resource for firms on problem gambling

The Lending Standards Board (LSB) has published a resource[10] for firms that considers how, in the context of the COVID-19 pandemic and the associated restrictions the government has put in place, firms can identify the early signs of problem gambling and act to protect and support vulnerable customers.

COVID-19: EBA reactivates guidelines on legislative and non-legislative moratoria on loan repayments

On 2 December 2020, the European Banking Authority (EBA) published a press release[11] announcing the reactivation of its guidelines on legislative and non-legislative moratoria on loan repayments in light of the second wave of COVID-19 and the continued constraints on the availability of credit to businesses and private individuals. It has also published a document[12] containing amendments to the guidelines and a consolidated version[13] of the guidelines themselves.

The EBA has introduced a new deadline for the application of moratoria of 31 March 2021, replacing the previous date of 30 September 2020. The EBA has also amended the guidelines to introduce new constraints intended to ensure that the support provided by moratoria is limited to bridging liquidity shortages triggered by the new lockdowns and that there are no operational restraints on the continued availability of credit:

  • the period of time for which payments on a loan can be suspended, postponed or reduced as a result of the application (and reapplication) of general payment moratoria should not exceed an overall length of nine months; and
  • banks are requested to notify to the relevant competent authority or authorities their plans for assessing borrowers’ unlikeness to pay in relation to exposures subject to legislative or non‐legislative general payment moratoria.

Transitional arrangements will apply to exposures that would have met the criteria specified in the guidelines in the period between 1 October 2020 and 1 December 2020.

Bank boards and supervisory expectations: ECB speech

The ECB has published a speech[14] by Elizabeth McCaul, ECB Supervisory Board Member, on bank boards and supervisory expectations. Among other things, Ms McCaul indicates that the ECB will publish a revised guide on fit and proper assessments in 2021, clarifying its expectations on the suitability of bank directors. The ECB has also established a dedicated fit and proper department, and an enforcement and sanctioning committee, to streamline the process further.

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