“The moratorium expires at the end of June and the banks currently have two options: to demand payment of the installments or to put insolvent customers into bad debts. With the crisis it is unthinkable that businesses and households will be able to start paying their debts again. For this reason we ask the government and the Bank of Italy that… ”. The appeal by Lando Maria Sileoni, general secretary of Fabi, the main banking union
It is a sort of appeal to the Draghi government and to the Bank of Italy – which must be activated at the EBA – the one launched today by the main union of banking workers, Fabi, led by Lando Maria Sileoni.
Here are all the details.
WHAT IS RISK WITHOUT THE EXTENSION OF THE MORATORY
“The moratorium expires at the end of June and the banks currently have two options: to demand payment of the installments or to put insolvent customers into bad debts. With the current crisis it is unthinkable that businesses and households can start paying their debts again. The problem is very serious because it has a social and economic impact. If only 10% of businesses with suspended loans fail, hundreds of thousands of jobs would be missing in an instant. To solve the problem, the government and the Bank of Italy must intervene with great incisiveness and conviction ”. This was stated by the secretary general of Fabi, Lando Maria Sileoni , commenting on the study on the moratoriums, interviewed live on La7 during the Coffee Break broadcast conducted by Andrea Pancani.
THE FABI APPEAL TO THE GOVERNMENT AND BANKITALIA
“Everyone must do their part with determination: the government must convince the European Commission, the Bank of Italy must act at the level of the European Banking Authority (EBA) to which it belongs. Money cannot be asked from those who, today, have not – underlined Sileoni – the same extension must also be requested for state guarantees on loans, this measure also expires in June. In addition to extending the deadline, as Abi rightly claims, the guarantee must be extended from 6 years to 15 years and must also be applied for loans exceeding 800,000 euros, for large companies. These interventions are essential to continue to support the country, ensuring liquidity for families and businesses. We must stop chasing situations: we chase the tampons, we chase the vaccines, we chase the other nations on economic measures, we chase the serious social problems of the country, without a minimum of foresight. Instead – he concluded – we need to start acting by anticipating events ”.
ALL RISKS REPORTED BY FABI
"There is a risk, at the end of June, when the moratoriums on almost 300 billion euros of bank loans expire, that 2.7 million Italian businesses and families will suddenly find themselves on the verge of substantial financial distress". It is when Fabi denounces, explaining that in about 100 days the last extension – introduced by the government with the budget law for 2021 – of the rule that has allowed, from the beginning of the Covid pandemic, to freeze the installments of the loans of 1.3 million companies for 198 billion and 1.4 million citizens for 95 billion: in total, over 293 billion.
HERE IS THE FABI FULL ANALYSIS
There is a risk, at the end of June, when the moratoriums on almost 300 billion euros of bank loans expire, that 2.7 million Italian companies and families will suddenly find themselves on the verge of substantial financial distress. It is when Fabi denounces, explaining that in about 100 days the last extension – introduced by the government with the budget law for 2021 – of the rule that has allowed, from the beginning of the Covid pandemic, to freeze the installments of the loans of 1.3 million companies for 198 billion and 1.4 million citizens for 95 billion: in total, over 293 billion. However, due to a series of restrictions approved by the European Banking Authority (EBA), in force since last January, new, stringent rules on the management of non-performing loans will have to be applied next June: the consequential interruption of the moratoriums, no longer extendable, will result in at least a significant portion of the parties with the installments currently suspended, in the absence of liquidity necessary to repay the arrears, can be classified by the banks in a default position.
According to Fabi, with data from the Liquidity Task Force updated to 10 March, the issue concerns 2.7 million debt positions (i.e. loans) of companies and household customers of banks that have submitted a request for suspension of installment payments by exploiting the possibility granted by the “Cura Italia” decree law (n. 18 of 17 March 2020) launched last year, at the beginning of the economic-health emergency caused by the Coronavirus. This measure proved to be useful and indispensable to ensure additional liquidity for both companies (1.3 million) and citizens (1.4 million). However, the pandemic has neither slowed down nor postponed the entry into force of new supervisory regulations for banks prepared by the EBA. More specifically, these are the guidelines on the management of NPLs that require banks to have a more rigid ranking of impaired loans: a strict regulation that has also affected, among other things, loans "suspended" with moratoriums and which, according to new European rules, should be classified as non-performing exposures. The European rules on non-performing loans entered into force last January, but the government, amidst the regulatory folds, managed to extend the suspension of loans until next June, with a rule included in the budget law for 2021: further postponements for the application of the Eba Guidelines, however, they will no longer be possible. Nor are some informal clarifications recently published by the EBA itself sufficient to avoid the risk of financial failure of 2.7 million subjects.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-fabi-incalza-governo-e-bankitalia-sulla-proroga-delle-moratorie/ on Mon, 22 Mar 2021 11:02:00 +0000.