March 20, 2020 / 3:18 PM / 11 days ago

ECB cuts even more slack to virus-stricken euro zone banks

FRANKFURT, March 20 (Reuters) - European Central Bank supervisors decided on Friday to provide fresh relief to euro zone banks struggling with the coronavirus outbreak, including by using some wiggle room in how they deal with loans that are not being repaid.

The ECB said its supervisors will “exercise flexibility” with regards to unpaid loans that are covered by state guarantees or moratoria put in place in response to the virus.

It also encouraged banks to avoid moves that would further strangle credit to the real economy when setting cash aside against unpaid loans under the IFRS 9 accounting standards. (Reporting By Francesco Canepa Editing by Balazs Koranyi)

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