EBA to preserve STS capital benefits despite payment freezes

By Tom Brown
14 Apr 2020

ABS eligible for the simple, transparent and standardised’ (STS) criteria could have lost its preferential capital benefits after payment freezes on consumer lending went into place across Europe, but the EBA has acted to clear up the uncertainty and confirm the capital benefits.

The European ABS market has been facing regulatory issues around the classification of loans with delayed payments ever since the covid-19 outbreak forced many lenders to grant payment holidays, usually at the behest of governments, to lenders struggling to pay mortgages or loans.

Mortgage moratoriums granted to struggling ...

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