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Archive » October 2020 » Covid-19 and credit: the reaction of Supervisors and the strategies of Italian banks

Covid-19 and credit: the reaction of Supervisors and the strategies of Italian banks

Matteo Camelia, Andrea Resti
October 2020 - n. 10
Keywords: Covid-19, vigilanza bancaria, rischio di credito
Jel codes: G21, G28

Faced with the Covid-19 pandemic, Bank Supervisors have reacted by deploying a set of measures aimed at supporting capital and promoting a more flexible interpretation of the accounting standards. The European Parliament has quickly passed additional rules (some of which temporary) to mitigate the negative effects of calendar provisioning and Ifrs 9, and to protect banks from shocks originated by Treasury bonds. Banks have themselves refined their analytical and monitoring tools, in order to avoid an overly pro-cyclical response to the crisis, while at the same time ensuring that less resilient borrowers are timely identified. Both Authorities and Financial institutions may however raise their level of ambition, in order to protect financial stability and support the economy.

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