COVID-19 and the Treatment of Restructured Loans for Financial Soundness Indicators (FSI) Compilation

Monday, November 23

Mr. Brian Kwok Chung Yee, Financial Institutions Division, Statistics Department, IMF
Mr. Mahmut Kutlukaya, Financial Institutions Division, Statistics Department, IMF

In response to the COVID-19 pandemic, a number of economies have seen their banking sector engage in loan restructuring—providing borrowers breathing room to face this severe negative shock. However, when conducted in large scale this type of forbearance can create uncertainty on the viability of the banking sector. So that, for financial stability monitoring purposes, it is important to properly account for these actions in FSI compilation.

The webinar

Participants will review recent country experiences with loan restructuring, as well as foundational accounting and regulatory practices related to loan loss classification and provisioning for restructured loans. Finally, the webinar introduces a tool to track the evolution of restructured loans to for macro-financial monitoring purposes.

The webinar will familiarize participants with the key methodological aspects related to loan classification and provisioning requirements and the challenge posed by restructured loans in the compilation of FSIs. Participants will also better understand the financial stability implications of the restructured loans.

Hervé Joly, Director (JVI)


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