(Bloomberg) -- European banking regulators, seeking to soften the blow from the second wave of Covid-19, are giving borrowers more time to seek payment holidays on troubled loans.
The European Banking Authority, which coordinates rules across the bloc, said it's reactivating policies that lapsed at the end of September that have already allowed borrowers to freeze repayments on 871 billion euros ($1.05 trillion). Under the new policy through March, banks can suspend or delay payments for borrowers for nine months.
“With the continued unfolding of the Covid-19 pandemic, it is crucial that banks continue to provide lending to the real economy,” the EBA said in a statement Wednesday.
While the move gives bank balance sheets and their customers more breathing space, the regulator also said it is monitoring the use of payment holidays for any signs the measures are masking underlying concerns about the solvency of some borrowers.
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