Maintaining the supply of credit for companies and households is the primary objective of banking supervision in Europe as well as Austria | FMA Österreich

Maintaining the supply of credit for companies and households is the primary objective of banking supervision in Europe as well as Austria

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The European Banking Authority (EBA) has also reiteratec that regulatory scope will be used to ensure financing for companies and households.

In a statement published today, EBA has reiterated that regulatory scope should be used in the treatment of non-performing loans (NPLs). In the statement EBA emphasises the significance of adequately and consistently identifying of non-performing loans is particularly significant in the current situation in order to be able to assess the economic effects of COVID-19 as accurately as possible. At the same time it also explicitly mentions the possibility of avoiding default by making consensual amendments to credit agreements. Public sector support measures for addressing the systemic effects of COVID-19 should equally not automatically be classified as forbearance. The granting of a moratorium on credit payments should not automatically lead to the credit being classified as in default. Furthermore, procyclical effects within the IFRS9 accounting framework should also be avoided for value adjustments, by exploiting the leeway inherent to the framework.

FMA and OeNB both support these measures, while also again emphasising that Austria’s banks are in a good position to overcome the economic impact of the current COVID-19 crisis and to support Austria’s real economy. Austrian banks have in recent years built up capital buffers which may be used in the current situation in order to maintain the supply of credit to companies and households.

Journalists may address further enquiries to:

Klaus Grubelnik (FMA)
Tel.: +43 / (0)1 / 24959-6006; +43 / (0)676 / 88 249 516; klaus.grubelnik@fma.gv.at

Dr. Christian Gutlederer (OeNB)
Tel.: +43 / (0)1 / 404 20- 6900;
christian.gutlederer@oenb.at

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