The European Banking Authority (“EBA“) has published its Guidelines on reporting and disclosure of exposures subject to measures applied in response to the Covid-19 crisis.
EBA says the Guidelines follow the implementation of a range of measures in Member States to address negative economic consequences of Covid-19, such as legislative moratoria on loan repayments and public guarantees to new lending, with the aim to support the operational and liquidity challenges borrowers face. It says the Guidelines have been developed to address data gaps in supervisory reporting and disclosure associated with such measures to ensure appropriate understanding of institutions’ risk profile and the asset quality on their balance sheets, both for supervisors and the wider public.
Further, EBA says the Guidelines cover information that is crucial for understanding the prudential soundness of individual institutions, without impacting their treatment of creditors under moratoria or public guarantees. The information requested reflects, it says, the type of information that senior management in institutions are asking for, and is key for understanding the overall financial stability in the EU.
Specifically, the Guidelines cover the following:
- reporting requirements to monitor the use of payment moratoria and the evolution of the credit quality of the exposures subject to such moratoria;
- disclosure requirements for the exposures subject to the payment moratoria;
- reporting and disclosure requirements for the new loans subject to specific public guarantees set up to mitigate the effects of Covid-19; and
- reporting requirements on other forbearance measures applied in response to Covid-19.
These additional reporting and disclosure requirements are expected to be time-limited as they are introduced strictly in the context of the Covid-19 pandemic.
Reporting should be performed on a quarterly basis, with the first reference date of 30 June 2020, and for an expected period of 18 months. Disclosure should be performed semi-annually on 30 June and 31 December.
The Guidelines also comprise a set of reporting and disclosure templates, which can be accessed via the following links:
- Annex 1 covers the Covid-19 reporting templates.
- Annex 2 covers the Covid-19 reporting instructions.
- Annex 3 covers the Covid-19 disclosure templates.