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me conti Business and household flows are at risk of major problems: automatic debits will no longer be allowed if there is insufficient liquidity in bank deposits.
The EBA rules
The possible interruption of automatic debits can become a boomerang and also affect the salaries Workers: Businesses and households that have an account that has remained “bankrupt” are at risk of a sudden interruption in paying bills, wages, social security contributions, mortgages and loans. The Centro de Estudios Unimpresa explains that all this is due to the entry into force of the new regulations issued by the EBA, the European Banking Authority, which, after three months of non-payments of 100 euros onwards, oblige the bank to report the client to the central risk office and classify all their exposure as “bad creditsIn the absence of sufficient funds to cover the payment, the bank blocks the transaction and cancels the relative Rid (Direct Interbank Relationship): this means that the bank’s customer falls behind with the owner of the Rid.
The risk for companies
Recently, in the pages of the newspaper (click here), we talked about the problem of checking accounts in the red. For all small and medium-sized companies, therefore, there is not only the concrete risk of a lack of small liquidity derived from the stoppage of current accounts in the red, but also a significant close to credit. As reported by the Messenger Service, the panorama of the banking sector is not homogeneous and some banks seem more oriented, at least in the first phase of application of the new rules, to maintain a smoother line, especially towards known clients.
“Since January, who has a checking account? discovered runs the risk of immediately defaulting on various issues, from financial institutions to INPS, from employees to so-called public service companies (energy, gas, water, telephone)”, Explains the Unimpresa Study Center. In addition, the new EBA regulations establish that for a non-payment of more than 100 euros, extended for three months, the client is classified as a “bad payer” and a report is sent to the risk center.
“The new image is worrying”
“The new regulatory framework, which has not been sufficiently explained by the banks, is worrying. Even small transgressions will no longer be possible and this means that for many artisans, merchants, small entrepreneurs and also for many families, they will no longer be able to take advantage of these small forms of flexibility which, especially in this critical phase due to the economic effects of the Covid pandemic, are essential to meet utility payments or other obligations, such as wages and social security contributions, loan and mortgage payments”Commented the vice president of Unimpresa, Salvo Politino.
The risk, now, is one “very strong credit crunch, an unavoidable consequence of reporting to the central risk office and reclassification of clients’ credit lines in the event of small arrears“.
Bankitalia’s position
“The new definition of non-compliance does not introduce a prohibition to allow Trespass: As already now, banks, in compliance with their own policies, can allow customers to use the account that leads to an excess beyond the availability available in the account or, in the case of a line of credit, beyond credit limit.The Bank of Italy specified this in a note in which it announced the entry into force of the new definition of default provided for by the European regulation on prudential requirements for credit institutions and investment firms.
Bankitalia highlights that the new rules, for Italy, are more rigorous than in other European countries. The new definition of default does not introduce a prohibition on allowing cost overruns: banks, in accordance with their corporate policies, can allow their clients to write off the amount available in the account, that is, beyond the credit limit.
As reported by Dnakronos, “It is important for intermediaries to provide information and assistance to their clients, to make them aware of the implications of the new discipline, help them understand the change underway, and adopt behaviors consistent with the new discipline. The Bank of Italy has asked banks and financial intermediaries in recent days to take measures in this direction“. For the Bank of Italy, it is incorrect to say that an excess of 100 euros is enough to be reported in default:”necessary – stresses the Bank of Italy – cthe transgression exceeds the ‘threshold of Relevance‘, that is to say, that it simultaneously exceeds both the absolute threshold (100 or 500 euros, depending on the nature of the debtor) and the relative threshold (1% of the exposure) and that the exceedance continues for more than 90 consecutive days (in some cases, for example for public administrations, 180 days)“.
