{
  "title": "Forbearance Patterns in the Post-Crisis Period",
  "publication": "IMF Working Papers, July 24, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2020/07/24/forbearance-patterns-in-the-post-crisis-period-49587",
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  "summary": "Using supervisory loan-level data on corporate loans, we show that banks facing 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.",
  "sections": [
    {
      "heading": "Data and approach",
      "content": "- Uses supervisory loan-level data on corporate loans.\n- Authors: Katharina Bergant, Thore Kockerols.\n- Publication date: July 24, 2020.\n- Publication type: IMF Working Papers, Working Paper No. 2020/140.\n- Pages: 43."
    },
    {
      "heading": "Allocation of forbearance",
      "content": "- 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.\n- Risky borrowers are more likely to receive:\n  - an increase in the overall limit of a loan product, or\n  - an increase in the maturity of a loan product,\n  from distressed lenders."
    },
    {
      "heading": "Effectiveness of forbearance on default probability",
      "content": "- The most common measure of forbearance is effective in the short run.\n- No forbearance measure significantly reduces the probability of default in the long run."
    },
    {
      "heading": "Forbearance and new lending interaction",
      "content": "- Evidence suggests forbearance and new lending are substitutes for banks.\n- High shares of forbearance are negatively correlated with new lending to the same group of borrowers."
    },
    {
      "heading": "Policy implications and relevance",
      "content": "- Findings can help policy makers shape surveillance and regulation in a future recovery from the Covid-19 pandemic.\n- Relevant subject areas: Banking; Capital adequacy requirements; Credit; Credit risk; Financial institutions; Financial regulation and supervision; Loans; Money; Nonperforming loans."
    },
    {
      "heading": "Key publication identifiers",
      "content": "- DOI: https://doi.org/10.5089/9781513550817.001\n- Issue: 140\n- Volume: 2020\n- ISBN: 9781513550817\n- ISSN: 1018-5941\n\nSource: IMF Working Paper \"Forbearance Patterns in the Post-Crisis Period\" by Katharina Bergant and Thore Kockerols, July 24, 2020.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2020/07/24/forbearance-patterns-in-the-post-crisis-period-49587"
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    "Authors: Katharina Bergant, Thore Kockerols",
    "Published: July 24, 2020",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513550817.001",
    "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.",
    "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:",
    "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.",
    "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.",
    "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.",
    "DOI: https://doi.org/10.5089/9781513550817.001",
    "Issue: 140",
    "Volume: 2020",
    "ISBN: 9781513550817",
    "ISSN: 1018-5941",
    "**Working Paper**"
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