Forbearance Patterns in the Post-Crisis Period
IMF Working Papers, July 24, 2020
Source details
- Canonical URL
- Forbearance Patterns in the Post-Crisis Period
Other formats
Bibliographic details
- Authors: Katharina Bergant, Thore Kockerols
- Published: July 24, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513550817.001
Data and approach
- Uses supervisory loan-level data on corporate loans.
- Authors: Katharina Bergant, Thore Kockerols.
- Publication date: July 24, 2020.
- Publication type: IMF Working Papers, Working Paper No. 2020/140.
- Pages: 43.
Allocation of forbearance
- Banks with high levels of non-performing loans relative to their capital and provisions were more likely to grant forbearance measures to the riskiest group of borrowers.
- Risky borrowers are more likely to receive:
- an increase in the overall limit of a loan product, or
- an increase in the maturity of a loan product,
from distressed lenders.
Effectiveness of forbearance on default probability
- The most common measure of forbearance is effective in the short run.
- No forbearance measure significantly reduces the probability of default in the long run.
Forbearance and new lending interaction
- Evidence suggests forbearance and new lending are substitutes for banks.
- High shares of forbearance are negatively correlated with new lending to the same group of borrowers.
Policy implications and relevance
- Findings can help policy makers shape surveillance and regulation in a future recovery from the Covid-19 pandemic.
- Relevant subject areas: Banking; Capital adequacy requirements; Credit; Credit risk; Financial institutions; Financial regulation and supervision; Loans; Money; Nonperforming loans.
Key publication identifiers
- DOI: https://doi.org/10.5089/9781513550817.001
- Issue: 140
- Volume: 2020
- ISBN: 9781513550817
- ISSN: 1018-5941
Source: IMF Working Paper "Forbearance Patterns in the Post-Crisis Period" by Katharina Bergant and Thore Kockerols, July 24, 2020.
Content in this bundle
- Working Paper