The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Coronavirus: Debt moratoria could boost Italian banks

Bankers say state guarantees to support payment holidays could prevent loan defaults.

mask-pavement-puddle-coronavirus-Italy-R-780.jpg

A mask is left in a puddle in Piazza del Duomo, Florence, as Italy battles a coronavirus outbreak

The announcement of an Italy-wide suspension on debt repayments has triggered new concern about Italian banks’ revenues and capital, including whether they will need to reclassify borrowers as higher-risk.

On Tuesday, the morning after Italy announced a national quarantine, deputy economy minister Laura Castelli told local radio station that a payment holiday would apply to residential mortgage borrowers throughout the country.

On Sunday, the Italian Banking Association (ABI) had also unveiled an agreement with local trade bodies to offer debt moratoria to small and medium-sized enterprises (SMEs) affected by the coronavirus.

Industry sources say the authorities in Italy and elsewhere in Europe are wary of triggering another banking crisis and could design the payment holidays to help the banks.

Hugo Cruz, banks analyst at KBW, even compares it to the US cash-for-clunkers programme to assist carmakers after the 2008 financial crisis.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree