BaFin is aware that the current situation may result in delays in the preparation, submission and publication of accounting documents for the financial year 2019 or the financial year 2019/2020. For the period until 30 June 2020, BaFin will not investigate potential violations resulting from statutory deadlines that have not been met. However, it is important to note that this is an exception that will apply for the period in which the measures aimed at tackling the coronavirus pandemic remain applicable. If the measures need to remain in place for longer, BaFin will extend the deadline accordingly.

In compliance with the requirements and conditions specified under the FAQ regarding the use of mortgages as Pfandbrief coverage and the respective discounts stipulated there, BaFin will likewise tolerate institutions using immovable property as collateral in their determination of capital requirements in accordance with Articles 92 to 386 of the CRR based on a mortgage lending value within the meaning of Article 4(1)(74) of the CRR in conjunction with section 22 of the German Solvency Regulation (Solvabilitätsverordnung – SolvV) without a prior inspection of the property to be mortgaged. If a mortgage lending value within the meaning of section 22 no. 4 of the SolvV is used, the discounts stipulated in the FAQ regarding the use of mortgages as Pfandbrief coverage must be applied to the value calculated in accordance with the requirements of section 16 (2) sentences 1 to 3 of the German Pfandbrief Act (Pfandbriefgesetz – PfandBG).

Under Commission Delegated Regulation (EU) 2015/61 (LCR DR), shares may qualify as high-quality liquid assets (HQLAs) if they have a proven record as a reliable source of liquidity, also in periods of stress. This requirement is deemed met where the level in decline in the share’s stock price during a 30-day market stress period does not exceed 40%.

In the course of the COVID-19 pandemic, it has been observed that many shares included in the main indices fluctuated more than 40% within 30 days.

Despite the substantial declines in the prices of these shares, it has been shown that shares are high-quality liquid assets even in this period of stress and thus remain a reliable source of liquidity within the meaning of Article 12(1)(c)(iii) of the LCR DR.

LSIs in Germany are therefore permitted to continue qualifying shares as HQLA in the LCR even in the event that the 40% limit is exceeded, provided that the shares are included in an index classified as a main index by the Commission under Regulation (EU) 2016/1646 and the shares meet all the other criteria under Article 12(1)(c) of the LCR DR, even if prices should decline more than 40% within 30 days during the market turbulence in the context of the COVID-19 pandemic.

On 2 April 2020, the European Banking Authority (EBA) published guidelines on general payment moratoria. BaFin incorporated these guidelines into its administrative practice on 3 April 2020. The EBA phased out the guidelines in accordance with its deadline of 30 September 2020. BaFin provided information about this on its website on 22 September 2020.

On 2 December 2020, in response to the second wave of the coronavirus pandemic, the EBA reactivated its guidelines. BaFin provided information about this on the same day. Payment relief that is granted to a borrower before 31 March 2021 can therefore fall under a general payment moratorium. However, a new payment relief measure for a loan – including any payment relief that has already been granted for that loan – may only apply to payments due within a total of nine months or that will be due in future. The EBA also requests that institutions explain to their supervisory authorities how they intend to assess whether the obligor is unlikely to repay the debt to the institution in full (margin no. 17 (bis)). This is to allow supervisors to gain an impression of how institutions have implemented the following requirement under margin no. 14: “Throughout the duration of the moratorium, institutions should assess the potential unlikeliness to pay of obligors subject to the moratorium in accordance with policies and practices that usually apply to such assessments”.

Margin no. 17 (bis) explicitly only refers to “obligors subject to any legislative or non-legislative general payment moratorium as referred to in paragraph 14.” This requirement also applies to payment moratoria for which institutions provided notification between 2 April 2020 and 30 September 2020. It expressly does not apply to loans that are currently (as of 1 January 2021) no longer subject to a general payment moratorium. A loan is only deemed to be subject to a general payment moratorium as of 1 January 2020 if the payments due before and after this date are lower than they would have been without a payment moratorium. For example, under the German legislative moratorium, obligors of a consumer loan contract under article 240 section 3 (1) of the Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche – EGBGB) could request that payments due between 1 April 2020 and 30 June 2020 be postponed. In this case, the payments due before and after 1 January 2021 would not be lower than they would have been without a payment moratorium. The loan would therefore not be deemed subject to the general payment moratorium as of 1 January 2021 even though postponed payments could be due after 1 January 2021, since under article 240 section 3 (5) of the EGBGB, for example, all contractual payments are postponed by three months.

German institutions not subject to direct supervision by the European Central Bank (ECB) should follow the steps below when notifying BaFin, in accordance with margin no. 17 (bis), of loans that were subject to a general payment moratorium as of 31 December 2020:

1. Institutions should ensure that, in the assessment of an obligor’s potential unlikeliness to pay, they apply the policies and practices that usually apply to such assessments for loans that are not subject to a general payment moratorium. (See margin no. 14 of Guidelines EBA/GL/2020/02). For loans subject to a general payment moratorium, institutions should perform the assessment of unlikeliness to pay based on the most up-to-date schedule of payment resulting from the application of the general payment moratorium. (See margin no. 16 of Guidelines EBA/GL/2020/02)
2. Case A: Based on step 1, in the assessment of an obligor’s potential unlikeliness to pay, the institution in question applies the policies and practices that usually apply to such assessments for loans that are not subject to a general payment moratorium. For the obligor or group of obligors concerned (e.g. defined by the scope of application of a risk classification system), the institution notifies the particular Regional Office of the Deutsche Bundesbank and the division at BaFin that are responsible for supervising the institution.
   Case B: Step 1 is not applied as described in case A. In respect of the obligor concerned, the institution transfers to the competent Regional Office of the Deutsche Bundesbank and the responsible division at BaFin a plan “outlining the process, sources of information and responsibilities in the context of the assessment of the potential unlikeliness to pay of obligors subject to any legislative or non-legislative general payment moratorium as referred to in paragraph 14.” (See margin no. 17 (bis)).

BaFin will contact the organisers of non-legislative moratoria with regard to the publication of this FAQ on its website. The organisers are listed in the FAQ “Which payment relief measures has BaFin notified to the EBA as general payment moratoria within the meaning of margin no. 10 of the EBA guidelines EBA/GL/2020/02?” BaFin will ask the organisers to notify the institutions participating in the respective payment relief initiative of their obligations under margin no. 17 (bis) of the amended EBA Guidelines (EBA/GL/2020/02) and to inform them of the procedure described in this FAQ.

Notifications under step 2 (case A or B) should be submitted to BaFin by 31 March 2021.

For payment relief initiatives notified to BaFin in the context of the reactivation of the EBA Guidelines (EBA/GL/2020/02), BaFin has established the following administrative practice:

1. In order for a payment relief initiative to be regarded as a modification of an existing general payment moratorium and not as a new payment relief initiative, the scope of exposures covered must be similar to the previous general payment moratorium (margin no. 14 under “Background and rationale”, EBA/GL/2020/15). This is not deemed to be the case if, in particular, the number of risk exposures covered is significantly reduced through restrictions applied to the circle of participating institutions, or, in individual institutions, the scope of risk exposures covered is changed through the exclusion or inclusion of individual loan types or obligor groups. If a payment relief initiative is classified as a new payment relief initiative, the transitional provision under margin no. 20 of EBA/GL/2020/02 (in the version EBA/GL/2020/15) is not applicable. However, institutions might still have de facto participated in the new payment relief initiative – including the limitation of payment relief to a maximum of nine months – before notification was given.
2. Payment relief granted by an institution between 1 October 2020 and 1 December 2020 can only be regarded as subject to a general payment moratorium if the institution granted the payment relief within the scope of a payment relief initiative in compliance with all of the requirements of the EBA Guidelines (EBA/GL/2020/02). Unlike general payment moratoria for which notification was provided between 2 April 2020 and 30 September 2020, payment relief granted on an individual basis cannot be regarded as part of a general payment moratorium, even if it meets the formal conditions of the general payment moratorium with regard to the changes in the payment schedule.

The information below is not affected by the changes to the EBA Guidelines (EBA/GL/2020/02). This information also applies to payment relief initiatives notified to BaFin in the context of the reactivation of the EBA Guidelines (EBA/GL/2020/02).

The lending provisions under Article 240 section 3 (1) of the EGBGB are an example of a general payment moratorium.

If a payment moratorium includes a concession towards the participating obligors, this does not hinder its classification as a general payment moratorium, even if the concession leads to a decrease in the present value of more than 1% for the lending institution.

The requirements under margin no. 17 (c) and (e) of the EBA Guidelines (EBA/GL/2020/02) set out that institutions are required to provide their national competent authorities with information on the total number of obligors and exposures within the scope of a non-legislative general payment moratorium. Furthermore, the following applies to all general payment moratoria: under margin no. 19 (a) of the EBA Guidelines (EBA/GL/2020/02), institutions are required to identify the exposures or obligors for which the general payment moratorium was offered. These requirements are deemed fulfilled if the institution provides or, as applicable, has available such information for a set of obligors or exposures, respectively, that according to the institution includes the obligors or exposures in question, even if this set also includes further obligors and exposures. To give an example, BaFin will not raise any objections to institutions identifying exposures beyond those for which it is clear to the institution that the obligor in question “has lost income due to the exceptional circumstances caused by the spread of the COVID-19 pandemic, making it unreasonable to expect them to repay the amount owed” (Article 240 section 3 (1) sentence 1 of the EGBGB) as exposures for which the legislative general moratorium under Article 240 section 3 of the EGBGB was offered.

BaFin’s administrative practice as regards the processing of payment relief initiatives is as follows:

Non-legislative payment moratoria are subject to a two-step notification procedure:

1. Participating institutions (or organisations acting on their behalf, such as industry associations) must notify BaFin in accordance with margin no. 17 should they decide to apply a payment relief initiative.
2. If BaFin determines that the payment relief measures meet the criteria under margin no. 10 of the guidelines, BaFin will notify the payment relief measure to the EBA as a non-legislative moratorium.

Both significant institutions (SIs) and less significant institutions (LSIs) make use of general payment moratoria. The notifications BaFin sends to the EBA are also sent to the European Central Bank. In addition, the notification is published in German on the BaFin-website in the answer to the FAQ "Which payment relief measures has BaFin notified to the EBA as general payment moratoria within the meaning of margin no. 10 of the EBA guidelines EBA/GL/2020/02?”. BaFin expects institutions that make use of a non-legislative general payment moratorium to also publicly communicate the payment relief measures themselves (e.g. on their website).

Before submitting their notification, the organiser of a payment relief initiative should regularly consult with BaFin and with the Deutsche Bundesbank on the question of whether the planned payment relief measure meets the criteria under margin no. 10 of the EBA guidelines EBA/GL/2020/02. The administrative practice which BaFin has developed in collaboration with the EBA is based on the following understanding of the objective of the guidelines:

In the COVID-19 crisis, states and institutions are taking relief measures that apply to a large group of obligors predefined on the basis of broad criteria. This serves above all to help the affected obligors through liquidity shortages. Ideally, the institution would negotiate an individual solution with each obligor, estimating the probability that an obligor will meet its obligation towards the institution in full on a case-by-case basis. If a large number of an institution's obligors are affected by the crisis, such a case-by-case assessment may not be possible at short notice or for all of the affected obligors. The guidelines therefore clarify how such payment relief measures are to be classified in particular with regard to the classification as a forbearance measure within the meaning of Article 47b of the Credit Requirements Regulation (CRR) and the definition of default under Article 178 of the CRR.

The criteria under margin no. 10 of the guidelines are arranged in such a way that institutions cannot be certain that obligors that would probably be able to meet their payment obligations in full in spite of financial losses resulting from the COVID-19 crisis will not also receive financial relief. Against this background, the guidelines make it clear that financial relief afforded to obligors as part of a general payment moratorium cannot in itself be classified as a forbearance measure within the meaning of Article 47b of the CRR or as a distressed restructuring within the meaning of Article 178(3)(d) of the CRR. (Margin no. 11)

Purely hypothetically, it is conceivable that an institution might subsequently judge that an obligor, at the time of the payment moratorium, probably would have been able to meet its payment obligations towards the institution in full. In practice, however, such an ex post assessment would not be possible, not least because of the IT requirements this would entail. This would also be of no practical value to the institution, since, for reasons of practicality, institutions base their risk management on their understanding of the obligor’s current situation. For this reason, the guidelines contain the following pragmatic rule: institutions assess whether a default has occurred within the meaning of Article 178 of the CRR or whether a forbearance measure has been adopted within the meaning of Article 47b of the CRR on the basis of the obligor’s payment obligations towards the institution as determined by the general payment moratorium (e.g. taking a postponement into consideration). (Margin nos. 13, 16)

In accordance with this objective of the guideline, the criteria under margin no. 10 of the guidelines are stipulated in such a way that individual solutions do not apply as part of a general payment moratorium. As such, it is specified under margin no. 10 b) that the “criteria for determining the scope of application of the moratorium should allow an obligor to take advantage of the moratorium without the assessment of its creditworthiness”.

BaFin’s administrative practice with regard to some specific scenarios is therefore as follows:

1. A necessary precondition for obligors to make use of a postponement under Article 240 section 3 (1) of the EGBGB is that the obligor suffers a loss of revenue due to the extraordinary circumstances which have arisen as a consequence of the spread of the COVID-19 pandemic which means that it is unreasonable to expect the consumer to make the contractually agreed payment. The obligor must demonstrate to the institution that they meet this precondition. The institution then reviews the plausibility of the information provided by the institution, where appropriate. The legal stipulations as regards the postponement period are exhaustive. The sentence stating that the postponement of payment as set out in sentence 1 of Article 240 section 3 (1) of the EGBGB is deemed not to apply provided obligors continue to make payments as contractually agreed makes it clear that it is solely the decision of the obligor whether they continue to make (partial) payments despite making use of the postponement. As such, the obligor alone may take the initiative to either apply the postponement or, equally, to make payments towards loans before the end of the postponement period. Although the institution may review the plausibility of the information provided by the obligor, it does not act on a case-by-case basis in a way that resembles a creditworthiness assessment. As such, postponements specified by the legislature in accordance with Article 240 section 3 (1) are regarded as legislative payment moratoria within the meaning of the EBA guidelines.
2. Where the parties concerned make arrangements which deviate from Article 240 section 3 (1) in accordance with Article 240 section 3 (2), it is to be assumed that the institution makes the arrangement with the obligor taking into consideration their specific economic circumstances, provided the deviating arrangement is not made within the scope of a non-legislative payment moratorium. Aside from this exception, a deviating arrangement in accordance with Article 240 section 3 (2) of the EGBEB is therefore not deemed to be made within the scope of a general payment moratorium.
3. Several institutions jointly communicate that every obligor within a large group may choose between various financial relief measures (e.g. postponement of principal payments for 9 months, or for shorter periods of time if the customer so wishes). This option granted to obligors is in line with the requirements of margin no. 10 (b) of the EBA/GL/2020/02 Guidelines and therefore also with the classification of such payment relief measures as general payment moratoria.
4. Several institutions jointly communicate to a large group of obligors a framework within which they are prepared to provide financial relief for the individual obligors (e.g. postponement of principal payments for up to 9 months). The decision regarding the specific financial relief measure does not fall solely to the obligor. It is to be assumed that an institution would gain an impression of the obligor’s specific economic circumstances before discussing with the obligor in question – to follow this example – the specific duration of a postponement. The specific arrangement regarding a postponement is therefore regarded as an individual agreement. A payment relief initiative which only provides a framework within which the institution and the obligor can make arrangements regarding financial relief is therefore not deemed to be a general payment moratorium.
5. Several institutions jointly communicate that a) each institution is to choose a specific offer from a common framework of similar offers for financial relief and b) the respective institution, within the framework of its specific offer, leaves the choice between the various financial relief measures solely to each individual obligor within a large group. This option granted to obligors is in line with the requirements of margin no. 10 (b) of the EBA/GL/2020/02 Guidelines and therefore also with the classification of such payment relief measures as general payment moratoria. For example: the institutions X and Y both provide notification of a payment relief initiative which provides for the postponement of principal payments for up to 12 months. Aside from the duration, the postponements take the same form. Institution X makes full use of the joint framework and offers postponements for up to 12 months. Institution Y only offers postponements for up to 9 months. Both institutions offer “similar payment relief measures” (margin no. 10 (a) of the EBA/GL/2020/02 Guidelines) within the framework of a joint general payment moratorium.

6. Several institutions effectively already participate in a general payment moratorium in accordance with margin no. 10 of the EBA/GL/2020/02 Guidelines before notifying this payment moratorium to BaFin and publicly communicating it. Effective participation in a payment moratorium that is later notified to BaFin and publicly communicated, including compliance with the additional requirements under margin no. 10 of the EBA/GL/2020/02 Guidelines, is based on relevant internal work instructions within the respective institution. Where payment relief measures are offered by an institution from the date on which corresponding internal work instructions are issued, such measures are to be regarded as granted within the framework of a general payment moratorium from the point in time when the relevant internal work instructions enter into force, as determined by the institution. For example: the institutions X and Y again both provide notification of a payment relief initiative which provides for the postponement of principal payments for up to 12 months. As before, aside from the duration, the postponements take the same form. Institution X makes full use of the common framework and offers postponements for up to 12 months from the point in time when notification of the initiative is provided. Institution Y only offers postponements for up to 9 months from the point in time when notification of the initiative is provided.
   Before providing notice of the payment relief initiative, institutions X and Y both offer the group of customers specified in the moratorium the following conditions according to their corresponding internal work instructions on a general basis (i.e. not as part of case-by-case solutions):

   a) Institution X offers postponements of up to 12 months, institution Y offers postponements of up to 9 months: all of the postponements offered by institutions X and Y on a general basis fall within the scope of the general payment moratorium, for which a joint notification is later submitted.
   b) Institution X offers postponements of up to 6 months, institution Y offers postponements of up to 12 months: all of the postponements offered by institution X fall within the scope of the general payment moratorium, for which a joint notification is later submitted. Institution Y, in contrast, only participates in the general payment moratorium following submission of the notification.

   The formal reason for the treatment described under b) is as follows: the postponement for 6 months offered by institution X can be deemed to fall within the scope of the payment relief initiative for which a joint notification is later submitted because, with the notification, institution X has merely extended the postponement periods. The postponement of 12 months offered by institution Y, however, does not fall within the scope of the payment relief initiative because, after submitting the notification, institution Y no longer offers postponements on a general basis of up to 12 months, but rather only up to 9 months.
   Practical implications: all postponements granted by institution X as part of its general postponement offer before it submitted the notification (= of up to 6 months) fall within the scope of the general payment moratorium. In contrast, none of the postponements granted by institution Y as part of its general postponement offer before it submitted the notification (= of up to 12 months) fall within the scope of the general payment moratorium. The postponements granted by institution Y before the notification will therefore be treated as postponements offered on a case-by-case basis. Even a postponement of only 6 months granted before the notification within the scope of a general offer for “postponements of up to 12 months” in line with the relevant work instructions does not fall within the scope of the general payment moratorium for which the notification is subsequently submitted.

The treatment described under b) is deemed necessary to avoid the indiscriminate inclusion of postponements in general payment moratoria for which notifications are subsequently submitted. However, if institution Y were to state in its notification that it offers postponements of up to 12 months, then all of the postponements it had granted on a general basis would fall within the scope of the moratorium. In other words: in order for the postponements granted by institution Y before the notification is submitted to be included in the scope of the general payment moratorium, institution Y must uphold the general offer as provided for by the internal work instructions after submission of the notification. This is deemed reasonable. Under a payment relief initiative, the obligor is not required to comply with covenants for the duration of the postponement. Margin no. 10 c) of the guidelines stipulates that: “... no other terms and conditions of the loans, such as the interest rate, should be changed.” Taken literally, it does not appear possible to apply this criterion since the impacts of a general payment moratorium on a contract cannot be anticipated in the contract itself. Rather, a general payment moratorium may result in a gap in the contract precisely because such a moratorium cannot provide for adjustments to individual contracts. Such gaps must be filled in the application of the contract. The suspension of covenants for the duration of the postponement is one option for this. This would not prevent the classification of a payment relief measure as a general payment moratorium.

An institution has offered several institutions guarantees for certain loans granted by these institutions. The institution is able to prompt these institutions to grant their obligors postponements for the repayment of loans subject to the guarantee. However, the guarantor institution requires that every obligor that has been granted a postponement for a loan subject to a guarantee is also offered a postponement for a loan not subject to a guarantee (if available) by the participating institutions. Through this arrangement, the postponement of a loan subject to a guarantee may prompt the creditor institution to begin negotiations with the obligor, on the basis of a creditworthiness assessment, regarding the details of such postponement of a loan that is not subject to a guarantee. This creditworthiness assessment is a consequence of the postponement of a loan subject to a guarantee; it is not a prerequisite for granting the postponement. The postponement of loans subject to a guarantee is therefore regarded as a non-legislative moratorium, provided the remaining requirements are met; the postponement of a loan not subject to a guarantee, in contrast, is regarded as an individual measure.

Institutions participating in a non-legislative payment moratorium must provide notification of this; for this purpose, they must ascertain the information specified under margin no. 17 of the EBA Guidelines. Institutions may give prior informal notice to BaFin and the Bundesbank that they are participating in the moratorium. This informal notice may also be given via the organiser of a payment moratorium, e.g. an industry association. The complete notification is to be submitted using the form entitled "Anzeige nach Absatz 17 der EBA-Leitlinien 2020/02" (notification in accordance with margin no. 17 of EBA Guidelines 2020/02 – no English translation available), which can be found under letter A on the linked page. The completed form must be submitted to the responsible division at BaFin and to the responsible Regional Office of the Deutsche Bundesbank, unless the notification is submitted jointly via the organiser of the moratorium. Institutions that have provided prior informal notice of their participation must additionally provide formal notification using this form.

Questions relating to antitrust law in connection with general payment moratoria do not fall under the scope of BaFin’s responsibility.

BaFin and Deutsche Bundesbank share the view of the IDW that the current situation does not lead to an undifferentiated, automatic transfer of financial instruments from Stage 1 to Stage 2 or even Stage 3.

The IDW is of the view that an automatic transfer could lead to the economic risks being significantly overstated. The transfer between Stages is based on the consideration of reasonable and supportable forward-looking information, the effects of which on the credit risk is derived from past experience. However, such a dynamic globally extreme situation is unprecedented. This leads to extreme estimation uncertainty; BaFin and shares the view that this requires the appropriate exercise of discretionary leeway.

Based on the following statement, which was coordinated with the German Federal Ministry of Finance (Bundesfinanzministerium – BMF) and BaFin, it is the view of the IDW that stabilisation measures mean that an undifferentiated, automatic transfer between Stages is not appropriate even for reporting dates after 31 March 2020:

“In view of the Corona crisis, the Federal Government as well as the Bundestag and Bundesrat have adopted far-reaching support programmes for companies operating in the economy. For the expected duration of the crisis, this will not only reduce ongoing cost burdens through moratoria, deferrals etc., but will also directly strengthen liquidity and, if necessary, capital, in order to compensate as far as possible for corona-related disruptions in the functioning of the affected companies. At the same time, this improves the companies’ ability to service their debts to their banks and avoids a significant increase in default risks.”

BaFin and Deutsche Bundesbank share this view. It is to be expected that banks will incorporate current and future findings into their customary processes.

The complete IDW technical note can be accessed at: https://www.idw.de/idw/im-fokus/coronavirus (only in German).

If a liability is postponed on a case-by-case basis, i.e. not in the context of a general payment moratorium, but interest is applied to the amounts postponed in line with the conditions originally agreed (“original effective interest rate”), this by itself will not imply that the obligor is to be considered defaulted.

This is because, firstly, such postponement serves to ensure that the liability stays within the advised limit, thus avoiding a “past due material credit obligation” within the meaning of Article 178(1)(b) of the CRR. Secondly, in the event of such postponement, the obligor’s financial obligation is not deemed to be diminished; this therefore does not constitute a “distressed restructuring” within the meaning of Article 178(3)(d) of the CRR. Even in the case of such a postponement an institution may consider it unlikely that the obligor will pay its credit obligations to the institution in full, implying that the obligor is to be considered defaulted.

Background: in accordance with the guidelines regarding the definition of default, which have already been implemented by some institutions and which the remaining institutions must implement by 31 December 2020, a financial obligation is not deemed to have been significantly diminished if the present value of the expected remaining payments, calculated using the customer’s original effective interest rate, falls by no more than 1%. (BaFin Circular 3/2019 (BA) in conjunction with EBA/GL/2016/17, margin no. 51). Given the lack of other criteria, BaFin will take this as a benchmark for estimating whether postponement results in a material loss in present value, regardless of the extent to which the guidelines have been implemented by the respective institutions.

The provision under Article 178 of the CRR also applies to the prudential backstop (Article 47a et seq. of the CRR) and to the NPL capital deduction. In other words, this falls under “living forbearance” and therefore not under the prudential backstop. The same applies to the ECB NPL calendar, which is applicable to significant institutions (SIs).

Otherwise, there is nothing in the MaRisk to oppose a general postponement of instalments in principle. In particular, the MaRisk does not specify the criteria and conditions under which postponement on a case-by-case basis for the benefit of the borrower or tenant would be allowed. This decision falls to the individual institutions and must be taken in line with their respective business policy within the scope of compliance with due diligence requirements customary in the industry. Naturally, the criteria used to determine what is considered customary in the industry are different in the event of such an unprecedented crisis. This will also be taken into consideration in subsequent inspections.

Under Commission Delegated Regulation EU 2015/61, shares and units in investment funds may qualify as high-quality liquid assets (HQLAs) – provided the remaining applicable criteria are considered – only if the funds’ common funds are solely made up of HQLA.

The requirements mentioned in the heading above are temporarily suspended for special funds held by less significant institutions (LSI) that only involve a single investor and where that investor lays down the investment guidelines for the investment fund. In accordance with Article 416(6) of the Capital Requirements Regulation (CRR) and Article 15 of Delegated Regulation EU 2015/61, HQLA in single-investor special funds can be considered with immediate effect as HQLA, regardless of whether the funds invest only in HQLA.

BaFin has notified the following payment relief initiatives as general payment moratoria to the EBA. The information BaFin submitted to the EBA in accordance with margin no. 18 of the EBA guidelines is presented below with the consent of the relevant organisers. The text of margin no. 18 can be found below.

1) Payment moratoria in accordance with Article 240 section 3 (1) of the EGBGB - contents of the notification submitted to the EBA dated 8 May 2020

re: a) Article 240 section 3 (1) of the EGBGB constitutes a legislative moratorium

re: b) Article 240 section 3 (1) of the EGBGB is obligatory for credit institutions

re: c) Not applicable

re: d) 1 April 2020

re: e) All consumer loan agreements which were concluded before 15 March 2020, provided the borrower suffers a loss of revenue due to the extraordinary circumstances which have arisen as a consequence of the spread of the COVID-19 pandemic which means that it is unreasonable to expect the consumer to make the contractually agreed payment.

re: f) Under Article 240 section 3 (1) of the EGBGB, claims on the part of the lender to repayment and payments of interest or of the principal which are due in the period from 1 April 2020 to 30 June 2020 are granted a postponement of payment for a period of three months as from the due date.

2) “vdp Amortization Moratorium” - dated 29 April 2020

re: a) The “vdp Amortization Moratorium” is a non-legislative payment moratorium

re: b) Not applicable

re: c) Six credit institutions operating in the area of commercial property mortgage loans. It is anticipated that additional institutions that operate in this area will follow shortly.

re: d) 29 April 2020

re: e) The criteria for selecting exposures subject to the moratorium are as follows:

Loans that are fully collateralised by security rights on immovable properties where at least 50% of the income is not generated through residential use, provided the following conditions are also met:

• Conclusion of the loan agreement and payment of the loan as per the contract before 14 March 2020.
• The contracting party to the loan must be an institution that has joined the moratorium. Where a loan is granted by numerous creditors, all creditors must have joined the moratorium or those institutions that have not joined the moratorium must give their consent.
• Where the institution that has joined the moratorium requires the consent of a third party, this is given upon the request of the institution that has joined the moratorium. Payment of interest and principal as per contract up until 31 March 2020. The commercial property loan mortgage is affected by the economic and/or regulatory consequences of the COVID-19 pandemic. These changes are due to the economic and/or regulatory effects of the COVID-19 pandemic; the applicant provides an explanation and substantiation for this as appropriate. In particular with regard to the borrower’s financial situation at the time of filing the application and the continued economic use of the object, it is not economically reasonable for them to service the loan under the previous terms and conditions. Since 31 March 2020, the borrower has not distributed any profits, paid dividends, issued shareholder loans or waived payments on such loans and they undertake not to do so for the entire duration of the postponement and until the postponed payments have been made.

re: f) The conditions offered on the basis of the moratorium are as follows:

Upon the request of the borrower, the participating institution postpones all principal repayments due in the period from the date on which the credit institute receives the application up until 31 October 2020.

The suspension of loan repayment does not result in an extension of the loan agreement. The lower principal repayments may result in higher interest payments during the remaining loan period. The suspended principal repayments must be made at the end of the loan contract term alongside the principal outstanding. If the loan agreement provides for new fixed interest rate periods, the bank’s offer for a new period of interest rate fixation will apply to the higher principal outstanding.

If during the COVID-19 pandemic the obligor is unable to comply with covenants, these will be suspended. The agreed financial ratios will be adapted to the postponement granted.

3) Moratorium for KfW state-aided loans passed through banks, granted before the COVID-19 pandemic

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) Almost all credit institutions operating in Germany which provide consumer or SME retail credit products also offer – as on-lending banks – the relevant programmes for KfW state-aided loans. The KfW has announced a standardised moratorium which is accessible to the obligor via the respective on-lending bank. The moratorium applies to all state-aided loan products and all ultimate borrowers within the scope of the KfW’s on-lending business.

re: d) 1 April 2020

re: e) The moratorium applies to all types of KfW state-aided loan products which are offered via on-lending credit institutions operating in Germany, i.e. to all KfW promotion programmes in the areas of corporate finance, energy and environment, municipal and social infrastructure, and housing. The preconditions are:

• The ultimate borrower or the company concerned, i.e. the final beneficiary, is experiencing temporary payment difficulties due to the coronavirus crisis.
• The on-lending institution acts on the order of and in consultation with the ultimate borrower, which has submitted a corresponding request for postponement to the on-lending institution.
• For corporate loans, the following conditions also apply: in the case of further loans provided by the on-lending institution to the respective ultimate borrower, the on-lending institution makes appropriate efforts to overcome the sub-borrower’s liquidity problems, for example through payment delays for its own loans or by maintaining or increasing the current account limit.

re: f) The conditions of the moratorium are as follows:

• Postponement of 9 monthly or 3 quarterly repayments
• Applications received between 1 April and 17 September 2020 are taken into account; postponement begins at the end of the following month, but not earlier than in 10 working days.
• Interest is still due on the outstanding amount of a loan according to the contractual conditions.
• Repayment of the postponed loan instalments may, at the obligor’s request, be equally distributed over the term to maturity or paid as a lump sum with the final repayment instalment (balloon).

4) Moratorium of the Association of Private Bausparkassen

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) Five private Bausparkassen

re: d) 15 May 2020

re: e) This payment moratorium applies to consumer loan agreements within the meaning of section 491 (1) sentence 2 of the German Civil Code (Bürgerliches Gesetzbuch – BGB), including loan agreements with a consumer as borrower within the meaning of section 491 (2) sentence 2 no. 5 of the BGB, provided they were concluded before 15 March 2020 and were not assigned default status by 15 March 2020. A further condition of the moratorium is that the borrower suffered a loss of revenue due to the extraordinary circumstances which have arisen as a consequence of the spread of the COVID-19 pandemic which means that it is unreasonable to expect the consumer to make the contractually agreed payment (Article 240 section 3 (1) of the Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche – EGBGB).

re: f) The conditions of the moratorium are as follows:

• The agreed payment moratorium, which postpones the due date of the lender's claims, extends, during the period of the payment moratorium, to the lender's claim to principal repayments and, in the case of bullet loans, to the balloon payment. If savings payments on a pre-financed Bauspar contract have been agreed as part of the loan agreement as loan repayments, the claim to these savings payments shall also be deferred.
• The agreed period of the payment moratorium is in principle 6 months. At the request of the customer, a shorter period for the postponement of payments will be granted. The application for the payment moratorium must be received by the Bausparkasse by 30 September 2020 at the latest.
• The lender does not waive its contractually agreed loan interest claim, nor does the contractually agreed interest rate change.
• The respective due dates of the first postponed payment and all subsequent repayments are postponed by the agreed period of the payment moratorium. The lender’s claim to receive interest payments remains in place for the extended loan period.
• The other conditions of the loan agreement remain unchanged.

5) Moratorium of the Association of German Banks (Bundesverband deutscher Banken – BdB) for consumers (mortgage lending)

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) Four credit institutions

re: d) 17 June 2020

re: e) Criteria include:

• Consumer mortgage loan agreement
• The loan agreement was concluded before 15 March 2020.
• The application for postponement is submitted by 31 August 2020.
• Interest and principal must have been paid in accordance with the contract up to 31 March 2020.

re: f) The moratorium provides for postponement of the principal repayments on consumer mortgage loans due between the time of the customer’s application for the moratorium and 31 December 2020 at the latest. During the moratorium, the contractual interest will be calculated based on the amount of the loan (including postponed principal repayments). The borrower’s interest rate hedging transactions will not be automatically adjusted to reflect the new interest and repayment schedule as a result of the moratorium.

If repayment is postponed during a fixed-interest period which ends before the end of the term of the loan agreement, the postponed amounts will be added to the residual debt at the end of the fixed-interest period and will be due for repayment in a single sum (balloon payment). Alternatively, the customer can agree with the bank that this sum will be included in any follow-up financing. If the term of the loan agreement and the fixed-interest period are due to end at the same time, the contractual term will be extended with the customer continuing to pay the contractually agreed interest and principal until the loan has been repaid in full.

6) BdB moratorium for consumers (consumer loans)

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) Two credit institutions

re: d) 17 June 2020

re: e) Criteria include:

• Non-mortgage consumer loans.
• The loan agreement was concluded before 15 March 2020.
• The application for postponement is submitted by 31 August 2020.
• Interest and principal must have been paid in accordance with the contract up to 31 March 2020.

re: f) The moratorium provides for postponement of the interest and principle repayments on consumer loans due between the time of the customer’s application for the moratorium and 31 December 2020 at the latest. During the moratorium, the contractual interest will be calculated based on the amount of the loan (including postponed principal repayments). The borrower’s interest rate hedging transactions will not be automatically adjusted to reflect the new interest and repayment schedule as a result of the moratorium.

The term of the loan agreement will be extended by the number of months necessary until repayment has been completed.

7) BdB moratorium for SMEs and the self-employed/independent professionals

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) Two credit institutions

re: d) 2 July 2020

re: e) Criteria include:

• Loan to a small or medium-sized enterprise (SME) (annual turnover of up to 50 million euros) or self-employed person/freelance professional who is not classified as a consumer.
• The company needs more liquidity due to the coronavirus crisis. The company cannot make payments without risking its economic foundations.
• The company was creditworthy as of 15 March 2020.
• The borrower confirms that, at the time of submitting the application and taking the postponement into account, they have not filed for insolvency, and have no reason to file for insolvency.
• At the date of application, the company is not undergoing a workout procedure or restructuring.
• The loan agreement was concluded before 15 March 2020.
• The application for postponement is submitted by 31 July 2020.
• Interest and principal must have been paid in accordance with the contract up to 31 March 2020.

re: f) The moratorium provides for postponement of the principal repayments due between the time of the customer’s application for the moratorium and 31 October 2020. During the moratorium, the contractual interest will be calculated based on the amount of the loan (including postponed principal repayments). The term of the loan agreement will be extended by the number of months necessary until repayment has been completed or, in the case of an annuity loan, by the number of months and days necessary until the repayment has been made in full in accordance with the contract.

Borrowers have to make appropriate use of their available liquidity to keep their business running.

8) BdB moratorium for “other businesses”

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) Two credit institutions

re: d) 2 July 2020

re: e) Criteria include:

• Loan to “other businesses” (not SMEs, self-employed persons, freelance professionals or consumers).
• Since 28 February 2020, the firm has not paid out any profits or dividends.
• The company needs more liquidity due to the coronavirus crisis. The company cannot make payments without risking its economic foundations.
• The company was creditworthy as of 15 March 2020.
• The borrower confirms that, at the time of submitting the application and taking the postponement into account, they have not filed for insolvency, and have no reason to file for insolvency.
• At the date of application, the company is not undergoing a workout procedure or restructuring.
• The loan agreement was concluded before 15 March 2020.
• The application for postponement is submitted by 31 July 2020.
• Interest and principal must have been paid in accordance with the contract up to 31 March 2020.

re: f) The moratorium provides for postponement of the principal repayments due between the time of the customer’s application for the moratorium and 31 October 2020. During the moratorium, the contractual interest will be calculated based on the amount of the loan (including postponed principal repayments). The term of the loan agreement will be extended by the number of months necessary until repayment has been completed or, in the case of an annuity loan, by the number of months and days necessary until the repayment has been made in full in accordance with the contract.

Borrowers have to make appropriate use of their available liquidity to keep their business running.

9) Moratorium of the Savings Banks Finance Group for Business and Corporate Clients – FK 1

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) 34 credit institutions

re: d) 30 June 2020

re: e) All loans to business and corporate clients

• with headquarters or main business activity in Germany
• with rating score 12 or better on internal master scale as of 13 March 2020

granted before [the announcement date of the non-legislative moratorium] to borrowers "that are suffering a liquidity shortfall due to the extraordinary circumstances caused by the spread of the COVID-19-pandemic such that they cannot reasonably be expected to meet their obligations”, with the exception of the following:

• State-aided or restructuring loans
• Classified as NPL
• Absence of consent of third party protection providers
• Loans to be repaid at maturity, credit lines, current account overdrafts, approved and tolerated overdrafts, credit card repayments and syndicated financing as well as all loan claims that are not exclusive to the institution granting the moratorium and for which a third party has to give their consent.

The non-legislative moratorium for each loan must be agreed in an individual contract by 30 September 2020 at the latest.

re: f) The contract change agreed within the framework of the non-legislative moratorium relates only to the previous individual contractual repayment agreement and takes the form of a repayment suspension. The non-legislative moratorium extends the previous loan term by the individually agreed period of 6 months while maintaining the previous interest rate.

10) Moratorium of the Savings Banks Finance Group for Business and Corporate Clients – FK 2

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) 172 credit institutions

re: d) 30 June 2020

re: e) All loans to business and corporate clients

• with headquarters or main business activity in Germany
• with rating score 12 or better on internal master scale as of 13 March 2020

granted before [the announcement date of the non-legislative moratorium] to borrowers "that are suffering a liquidity shortfall due to the extraordinary circumstances caused by the spread of the COVID-19-pandemic such that they cannot reasonably be expected to meet their obligations”, with the exception of the following:

• State-aided or restructuring loans
• Classified as NPL
• Absence of consent of third party protection providers
• Loans to be repaid at maturity, credit lines, current account overdrafts, approved and tolerated overdrafts, credit card repayments and syndicated financing as well as all loan claims that are not exclusive to the institution granting the moratorium and for which a third party has to give their consent.

The non-legislative moratorium for each loan must be agreed in an individual contract by 30 September 2020 at the latest.

re: f) The contract change agreed within the framework of the non-legislative moratorium relates only to the previous individual contractual repayment agreement and takes the form of a repayment suspension. The non-legislative moratorium extends the previous loan term by the contractually agreed period of 9 months or, should the customer so request upon submitting their application, by a shorter postponement period of at least 3 months while maintaining the previous interest rate.

11) Moratorium of the Savings Banks Finance Group for Private Clients (consumer loans)– PK 1

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) 35 credit institutions

re: d) 30 June 2020

re: e) All loans to private clients granted before [the announcement of the non-legislative moratorium] to borrowers "that are suffering a liquidity shortfall due to the extraordinary circumstances caused by the spread of the COVID-19-pandemic such that they cannot reasonably be expected to meet their obligations", with the exception of the following:

• State-aided, restructuring, or employer loans
• Classified as NPL
• Absence of consent of third party protection providers
• Loans to be repaid at maturity, loans with a remaining debt of less than 200 euros, current account overdrafts, approved and tolerated overdrafts, credit card repayments as well as all loan claims that are not exclusive to the institution granting the moratorium and for which a third party has to give their consent.

The non-legislative moratorium for each loan must have been agreed in an individual contract by 30 September 2020 at the latest.

re: f) The contract change agreed within the framework of the non-legislative moratorium relates only to the previous individual contractual repayment agreement and takes the form of a repayment suspension. The non-legislative moratorium extends the previous loan term by the individually agreed period of 6 months while maintaining the previous interest rate.

12) Moratorium of the Savings Banks Finance Group for Private Clients (consumer loans) – PK 2

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) 179 credit institutions

re: d) 30 June 2020

re: e) All loans to private clients granted before [the announcement of the non-legislative moratorium] to borrowers "that are suffering a liquidity shortfall due to the extraordinary circumstances caused by the spread of the COVID-19-pandemic such that they cannot reasonably be expected to meet their obligations", with the exception of the following:

• State-aided, restructuring, or employer loans
• Classified as NPL
• Absence of consent of third party protection providers
• Loans to be repaid at maturity, loans with a remaining debt of less than 200 euros, current account overdrafts, approved and tolerated overdrafts, credit card repayments as well as all loan claims that are not exclusive to the institution granting the moratorium and for which a third party has to give their consent.

The non-legislative moratorium for each loan must be agreed in an individual contract by 30 September 2020 at the latest.

re: f) The contract change agreed within the framework of the non-legislative moratorium relates only to the previous individual contractual repayment agreement and takes the form of a repayment suspension. Each principal payment subject to the moratorium is postponed by the contractually agreed period of 9 months or, should the customer so request upon submitting their application, by the aforementioned shorter deferral period of at least 3 months. The postponement extends the term of the loan.

13) Moratorium of the Association of German Public Banks for corporate customers (principal payments only)

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) Two credit institutions

re: d) 23 June 2020

re: e) The customer is a company and the loan is neither a credit line, a current account overdraft or an approved and tolerated overdraft, a state-aided loan, a restructuring loan or (when the moratorium is first applied) an NPL, nor is it a commercial real estate mortgage (fully collateralised by security rights on immovable properties where at least 50% of the income is not generated through residential use). Capital market loans or capital market-related loans are also excluded from the moratorium. The loan agreement was concluded before 15 March 2020 and the borrower is unable to make the contractually agreed payments as a consequence of the COVID-19 pandemic.

re: f) Principal repayments for loans to be repaid at maturity and loans to be repaid in instalments may be postponed for a period of up to six months. For loans to be repaid in instalments, either the postponed principal repayments are to be repaid at the end of the regular term of the loan together with the final instalment, or the loan is extended by the duration of the postponement.

14) Moratorium for the Cooperative Financial Network (consumer loans)

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) 476 credit institutions

re: d) 22 July 2020

re: e) Loans granted before 15 March 2020 to consumers and Swiss retail clients who are suffering liquidity problems as a result of the COVID-19 pandemic provided the obligor had not been assigned default status on 15 March 2020, with the exception of the following:

• Current accounts with credit lines, approved/tolerated overdrafts, state-aided loans and credit card repayments.
• Syndicated loans, provided not all consortium banks make use of the moratorium.
• Loans subject to the legislative moratorium under Article 240 section 3 (1) of the EGBGB or to an individual arrangement regarding a postponement under Article 250 section 3 (2) of the EGBGB.

The non-legislative moratorium for each loan must have been agreed in an individual contract by 31 March 2021 at the latest.

re f) Participating institutions make an abstract decision that is uniform for all customers or customer groups to whom the moratorium is offered to suspend either loan or interest repayments or to suspend both loan and interest payments for a period of up to 18 months, as decided by the obligors; from 1 October 2020 onwards, for a maximum of nine months. The maximum period of nine months will take into account any arrangements regarding a postponement that were already in place before 1 October 2020 and that resulted from this non-legislative moratorium for the Cooperative Financial Network for non-consumer loans. Once a uniform decision is reached by those institutions taking part in the moratorium, the postponement will result in an extension of the term of the loan for all customers, in addition to higher repayments during the remaining term of the loan, which is not shortened, or to an increased final payment.

15) Moratorium for the Cooperative Financial Network (non-consumer loans)

re: a) Non-legislative moratorium

re: b) Not applicable

re: c) 483 credit institutions

re: d) 22 July 2020

re: e) Loans granted before 15 March 2020 to non-consumers who are suffering liquidity problems as a result of the COVID-19 pandemic provided the obligor had not been assigned default status as per 31 December 2019, with the exception of the following:

• Current accounts with credit lines, approved/tolerated overdrafts, state-aided loans and credit card repayments.
• Syndicated loans, provided not all consortium banks make use of the moratorium.

The non-legislative moratorium for each loan must have been agreed in an individual contract 31 March 2021 at the latest.

re f) Participating institutions make an abstract decision that is uniform for all customers or customer groups to whom the moratorium is offered to suspend either loan repayments or both loan and interest payments for a period of up to 18 months, as decided by the obligors; from 1 October 2020 onwards, for a maximum of nine months. The maximum period of nine months will take into account any arrangements regarding a postponement that were already in place before 1 October 2020 and that resulted from this non-legislative moratorium for the Cooperative Financial Network for non-consumer loans. Once a uniform decision is reached by those institutions taking part in the moratorium, the postponement will result in an extension of the term of the loan for all customers, in addition to higher repayments during the remaining term of the loan, which is not shortened, or to an increased final payment.

16) “vdp Amortization Moratorium” dated 4 January 2021

re: a) The “vdp Amortization Moratorium” is a non-legislative payment moratorium

re: b) Not applicable

re: c) Five credit institutions operating in the area of commercial property mortgage loans

re: d) 4 January 2021

re: e) The criteria for selecting exposures subject to the moratorium are as follows: loans that are fully collateralised by security rights on immovable properties where at least 50% of the income is not generated through residential use, provided the following conditions are also met:

1. Conclusion of the loan agreement and payment of the loan as per the contract before 14 March 2020.
2. The contracting party to the loan must be an institution that has joined the moratorium. Where a loan is granted by numerous creditors, all creditors must have joined the moratorium or those institutions that have not joined the moratorium must give their consent.
3. Where the institution that has joined the moratorium requires the consent of a third party, this is given upon the request of the institution that has joined the moratorium.
4. Interest and principal repayments that were due before the application was submitted have been paid as per contract or, in the case of principal repayment, postponed based on the “vdp Amortization Moratorium” dated 29 April 2020.
5. The commercial property loan mortgage is affected by the economic and/or regulatory consequences of the COVID-19 pandemic. These changes are due to the economic and/or regulatory effects of the COVID-19 pandemic; the applicant provides an explanation and substantiation for this as appropriate. In particular with regard to the borrower’s financial situation at the time of filing the application and considering the economic impact of their continued ownership of the property in question, it is not economically reasonable for them to service the loan under the previous terms and conditions.
6. Since 30 September 2020, the borrower has not distributed any profits, paid dividends, issued shareholder loans or waived payments on such loans, and they undertake not to do so for the entire duration of the postponement and until the postponed payments have been made.
7. The borrower submitted the application before 31 March 2021 as prescribed, and the institution that has joined the moratorium confirmed for the borrower before 31 March 2021 that the conditions for application of the moratorium had been met, and informed the borrower of the changes in the payments.

re: f) The conditions offered on the basis of the moratorium are as follows:

Upon the request of the borrower, the participating institution postpones all principal repayments due in the peri

d from the date on which the credit institute receives the application up until 31 December 2021, but for a maximum total of nine months less the period of postponement granted under the “vdp Amortization Moratorium” dated 29 April 2020.
The suspension of loan repayment does not result in an extension of the loan agreement. The lower principal repayments may result in higher interest payments during the remaining loan period. The suspended principal repayments must be made at the end of the loan contract term alongside the principal outstanding. If the loan agreement provides for new fixed interest rate periods, the bank’s offer for a new period of interest rate fixation will apply to the higher principal outstanding.

If during the COVID-19 pandemic the obligor is unable to comply with covenants, these will be suspended. The agreed financial ratios will be adapted to the postponement granted.

Margin number 18 of the Guidelines on legislative and non-legislative moratoria applied in the light of the COVID-19 crisis (EBA/GL/2020/02)

“18. National competent authorities should notify the EBA of any use of general payment moratoria in their jurisdictions and provide all of the following information for each moratorium:

(a) whether it is a legislative or non-legislative moratorium;
(b) in the case of a legislative moratorium, whether it is compulsory for institutions or, if it is not compulsory, whether institutions are publicly encouraged in some way to use the moratorium;
(c) in the case of a non-legislative moratorium, the extent of the use of the moratorium by the banking industry in their jurisdiction;
(d) the date from which the moratorium applies;
(e) the selection criteria for exposures subject to the moratorium, referred to in paragraph 10(b);
(f) the conditions offered based on the moratorium including the duration of the moratorium.”

The accounting standard IFRS 9 stipulates that estimates of expected loss for determining impairments are performed on a point-in-time basis and take into account forecasts for future macroeconomic development.

BaFin recommends that institutions place greater emphasis on scenario estimates that remain stable over the long term and that are based on past experience for the estimation of credit loss and for the assessment of the necessity of a transfer between Stages within the scope permitted under the IFRS.

This applies in particular where banks are facing uncertainties in generating reasonable and supportable forecasts. Measures by the public authorities intended to mitigate the effects of the crisis, such as support programmes and moratoria, should also be taken into account by institutions in their estimates.

BaFin supports the work of the SSM in providing central macroeconomic scenarios in order to support banks in implementing the impairment rules under IFRS 9. The SSM has provided more detailed information on its website at https://www.bankingsupervision.europa.eu/press/letterstobanks/html/index.en.html.

Current legislation already provides for this. Under section 2 (3) of the German Regulation Governing Large Exposures and Loans of €1 Million or More (Groß- und Millionenkreditverordnung – GroMiKV), within a group of institutions, exposures do not have to be counted in the amount of up to 93.75%, meaning the large exposure limit can be raised to up to 400% of eligible capital (of Tier 1 capital from 28 June 2021), if so requested by the institution provided the exposures do not constitute participations or other kinds of holdings and provided the requirements specified under section 2(3) of the GroMiKV are met.