Bank regulators and supervisors have taken a number of important measures over the past two weeks in reaction to the coronavirus crisis. In our view, those measures make a lot of sense in the current fire-fighting context. We consider that the two priorities of bank regulators and supervisors should be 1) to ensure that credit is extended to enterprises during these extremely challenging times, and 2) to preserve financial stability. This is precisely what they are doing: the measures taken have to be analysed together and, seen through that lens, they show a high level of coherence.
Among those measures, the most noteworthy are:
- Excluding from non-performing loans credit extended by banks to support enterprises facing liquidity difficulties and benefiting from state guarantees.
- Comment: this is the best way to resolve the impossibility that banks would have otherwise to support the economy without endangering