The European Parliament has approved changes to the CRR to encourage banks to lend to customers affected by Covid-19. Among other things, the changes:
- extend the transitional arrangements for IFRS 9 by 2 years and provide capital add back;
- align minimum coverage requirements for non-performing loans guaranteed by the public sector with those guaranteed by official export credit agencies;
- defer application of the leverage ratio buffer to January 2023;
- give a more favourable prudential treatment to loans to pensioners or permanent employees that are backed by pension or salary;
- give better treatment to certain exposures to SMEs or infrastructure; and
- no longer require banks to deduct certain software assets from their capital.
The EP’s plenary vote on the measures is due on 19 June.