EU Adjusts Number of Bank Rules to Stimulate Lending
The Council of the European Union countries is temporarily adjusting some rules of the banking system to increase the ability of banks to lend to the economy, the EU Council said.
« The EU is temporarily adapting banking rules to maximize the ability of banks to provide loans and support households and enterprises to recover from the COVID-19 crisis, » the release said.
It is noted that the package adopted on Wednesday represents « targeted and exceptional legislative changes in the regulation of capital requirements (CRR2). » A number of adjustments were agreed, among which there are changes to the minimum amount of capital that banks must keep under non-performing loans (NPL).
Previously, this package of measures was approved by the European Parliament. It will enter into force the day after its publication in the Official Journal of the European Union. This should happen no later than the end of June, the report says.
In the EU, amid the coronavirus pandemic, large-scale restrictions were introduced in the field of socio-economic life, including the closure of restaurants, shops, beauty salons, sports clubs, the abolition of public events and restrictions on movement and tourism. The EU economy has been hit hard by this. The union countries have already begun to mitigate quarantine measures, however, according to the latest forecasts of the European Commission in May, the union’s GDP will collapse by more than 7% this year against 1.5% growth last year. Unemployment, in her opinion, could jump to 9% from 6.7% in 2019.