Abstract:
Surely 2020 will be a year that will not be easily forgotten. The start of the new year was ushered in by the news that in the city of Wuhan, health authorities had identified the first cases of patients showing symptoms of severe pneumonia of unknown causes. A few days later it was discovered that the virus has animal origin, generates acute respiratory infections and is subsequently called Covid-19 (COrona VIrus Desease 2019)
In the space of a few weeks the covid has spread almost all over the world, first touching Thailand, and then arriving in Italy and in many other countries until March 11, 2020 the Director General of the WHO officially declares that the coronavirus epidemic is a pandemic.
Soon every country began to adopt interpersonal distancing measures to avoid situations that could be the source of transmission of the virus such as: suspension of school activities, stop to recreational and meeting activities, closure of shops, bars, cinemas, theatres and production activities: the whole world has almost stopped and this had a dramatic impact on the world economic system.
Unlike previous crises, in the one caused by Covid 19, the banking system is not at the root of the problem, but wants to be part of the solution and an important collective effort is being made in this regard.
The ECB and other supervisory and regulatory authorities have accepted the challenge by adapting their supervisory strategy to changing circumstances. After the shock, the banking union was able to give a rapid, unified and unprecedented response.
The ECB has undertaken a set of rules aimed at avoiding economic collapse so that they could be used as an example to prevent similar scenarios in the future. Among the various measures taken, the one on which my work is based is the granting of temporary flexibility with regard to non-performing loans (NPLs).
The overall objective of the strategy is to eliminate NPLs from banks' balance sheets, while providing sufficient collateral for borrowers and ensuring an appropriate balance between the interests of creditors and borrowers.
