On 12 March 2020, the European Banking Authority (EBA) issued a statement on actions to mitigate the impact of COVID-19 on the EU banking sector.

Key points in the statement include:

• the EBA will postpone the EU-wide stress test exercise to 2021. This is intended to allow banks to focus on and ensure continuity of their core operations, including support for their customers;
• the EBA will carry out an additional EU-wide transparency exercise in order to provide updated information on banks’ exposures and asset quality to market participants;
• EBA recommends that Member State competent authorities (NCAs) plan supervisory activities, including on-site inspections, in a pragmatic and flexible way, and possibly postpone those deemed non-essential;
• NCAs are encouraged, where appropriate, to make full use of the flexibility already embedded in the existing regulatory framework;
• it is crucial that the classification of exposures accurately and timely reflects any deterioration of asset quality. There is, however, flexibility in the implementation of the EBA Guidelines on management of non-performing and forborne exposures and the EBA calls for a close dialogue between supervisors and banks, also on their non-performing exposure strategies, on a case by case basis.