## Forbearance Patterns in the Post-Crisis Period

_IMF Working Papers, July 24, 2020_

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## Bibliographic details
- Authors: Katharina Bergant, Thore Kockerols
- Published: July 24, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513550817.001

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### 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.*

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_Source: https://www.imf.org/en/publications/wp/issues/2020/07/24/forbearance-patterns-in-the-post-crisis-period-49587_