The European Banking Authority (EBA) published guidelines on 2 April on the criteria that must be fulfilled in order for measures taken to be viewed as general moratoria. FI considers exemptions from amortisation requirements for mortgages and payment reliefs for small and mid-sized firms in accordance with the Swedish National Debt Office’s loan guarantees to be measures that can be viewed as general moratoria under the guidelines.
Within the EU, different measures have been taken to counteract the negative economic impact of the spread of COVID-19. One such example is measures that provide households or firms with the possibility of temporarily suspending amortisation payments. The EBA’s guidelines provide guidance on the criteria that must be met for measures taken from this perspective to be considered general moratoria.
The EBA’s guidelines state that a payment relief granted as general moratoria does not trigger an individual assessment of whether it is a forbearance measure. This means that general payment reliefs on their own do not result in forbearance classification. However, institutions are expected to continue to identify and monitor borrowers who are facing a risk of long-term payment difficulties and classify these exposures using existing requirements. Exposures that could be associated with financial difficulties at the borrower already before the moratorium was introduced must also continue to be classified as an exposure subject to forbearance measures.
It is FI’s opinion that general guidelines on exemption from the requirement on amortisation on special grounds for mortgages and payment reliefs for small and mid-size firms’ existing loans resulting from the establishment of a government guarantee programme for companies (under which the Swedish National Debt Office issues loan guarantees) are measures that meet the criteria on general moratoria in accordance with the EBA guidelines.
In this context, it should be noted that when an institution applies payment relief measures that do not fall within the definition of these guidelines, but instead apply an individual measure where the loan conditions are changed due to the situation specific to the borrower in question, the bank must assess on a case-by-case basis whether the measure meets the definition of a forbearance measure and whether there has been a significant increase in the credit risk.