ITA CB Eurosystem Loan Financing

On May 20, ITA CB issued rules on loans financing transactions.

  • ITA CB announced bank loans can secure financing transactions with Eurosystem.
  • Overview
  • To encourage use of collateral loans and incentivize credit to small and SMEs, ITA CB has expanded Additional Credit Claims (ACC) scheme to also include as eligible loans with public guarantee per Covid-19.
  • Following easing of eligibility criteria of guarantees adopted last Apr. 7 in response to Covid, ECB approved first set of measures to extend ITA CB scheme regarding ACC.
  • The measures now introduced aim to support lending to small and SMEs and to promote access by Italian banks to liquidity offered by the Eurosystem.
  • Eligible Loans
  • Loans backed by guarantees introduced by LD 23/2020 to cope to Covid emergency.
  • Issued by SACE and SME fund, the haircut applied to each loan will take into account both rating of guarantor, for % of coverage of guarantee on overall loan amount.
  • Also the debtor's rating (if suitable and available) for unsecured part.
  • Loans granted to businesses for whose debtors only statistical evaluation is available.
  • I.e. without qualitative analysis, produced by ITA CB's internal system of credit quality assessment (ICAS), even if individually given as collateral (so far, these assessments were used only for loans granted within the portfolios of business loans).
  • Loans within business credit portfolios regardless of probability of insolvency (PD) attributed to debtor (maximum PD limit is therefore eliminated, currently 10%).
  • Loans disbursed in form of recourse factoring, not only in recourse factoring as up to now possible, but both in ordinary and in temporary scheme of ACC.
  • It is understood that only performing loans can be given as collateral both at time of transfer and during the entire duration of the same.
  • Effectiveness
  • Measures will enter into force on May 25, 2020 and will be applied until Sep. 2021.
  • By said date ECB will assess them to ensure adequate availability of guarantees.
  • For counterparties, also considering that current national ACC schemes are expected to remain in effect until Mar. 2024.
  • Operating instructions for counterparties will be published in policy tools documents re monetary policy - guide for operators available at ITA CB website.
  • May 2020 Update
  • On May 21, 2020, ITA CB expanded the loans scheme for Additional Credit Claims (ACC), including the eligibility of loans with a public Covid-19 guarantee.

Regulators ITA CB
Entity Types Bank; BS; CNSM; Corp; CU; MSB; Thrift
Reference PR 5/21/2020, 5/20/2020; LD 23/2020; COVID-19
Functions Compliance; Financial; Legal; Operations; Reporting; Risk; Treasury
Countries Italy
Products Banking; Corporate; Loan
Regions EMEA
Rule Type Guidance
Rule Date 5/20/2020
Effective Date 5/25/2020
Rule Id 78080
Linked to N/A
Reg. Last Update 5/21/2020
Report Section EU

Last substantive update on 05/21/2020