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The Ministry of Finance (MF) “welcomes” the decision of the European Banking Authority (EBA), which allowed the reopening of the credit default, as a way to respond to the difficulties that many companies and families are going through, at this time, to bear the loan charges. And the EBA’s decision was immediately accepted by the ministry supervised by João Leão, who has just announced that it will promote the necessary changes in the public banking moratorium to extend adherence to the moratorium until March 31, 2021.
As reported by the PUBLIC this Thursday, the decision taken by the EBA reopens the possibility of new adhesions to this solution to postpone the charges on the credits, with effect from October 1, 2020 until March 31 of next year.
After closing access to the measure on September 30, the new decision of the Banking Authority leaves room for governments and the financial sector, through their associations, to reopen the existing moratoriums or launch new ones. In the case of Portugal, the Treasury has already accepted this challenge in relation to the public moratorium, which covers loans for housing, education and loans to companies.
In a comment on the measure, the Ministry of Finance says it welcomes the EBA’s decision, which “reflects the recognition that the second wave of the pandemic continues to cause liquidity challenges and constraints to the economy, particularly to the families and businesses in the United States. Member states “.
Banks are analyzing the changes, not for the moment what they intend to do. “Following the EBA’s decision to reactivate the guidelines on moratoriums, and given that the flexibility now granted is subject to conditions that did not exist before, the Portuguese Banking Association (APB) analyzes its implications for customers and banks that must be addressed in the legislative change to be implemented ”, the associative structure told PÚBLICO.
Credit arrears allow the temporary suspension of payment of credit installments, in terms of principal and interest, or only in one of the components. This suspension is not classified as doubtful or doubtful credit, since if it were, it would have disadvantages for the holders of these credits and for the banks, due to the recognition of these amounts in their balance sheets.
After the rapid acceptance of the Government, the decision of the banks and specialized credit institutions, represented in the Association of Specialized Credit Institutions (ASFAC), regarding the reactivation of private moratoriums.
The duration of the new moratoriums will be nine months, in order to allow time for the economy to recover and consequently for the treasury of companies and individuals to restart payments. The EBA’s decision refers to December 2, this Wednesday, but the new moratoriums may affect loans in default since early October, when the previous framework in force since April was suspended. Without the EBA framework, banks would have to automatically start provisioning the loan amount after 90 days of default.
The EBA’s decision is explained by the harsh impact of the second wave of the pandemic, which reached a much larger scale than expected, forcing the authorities of each country to take new restrictive measures, such as the suspension or limitation of economic activities and temporary confinement. of citizens. And to ensure that banks can continue to provide new loans to businesses and families.
In Portugal, more than 700 thousand clients, individuals and companies joined the moratorium, according to data from the Bank of Portugal.
