Coronavirus Policy Response
Fiscal and monetary authorities are stepping up support measures to reduce market strains and avoid permanent damage to households and businesses. These measures will have varying credit effects for different sectors and asset classes.
  • SUMMARY
  • REPORTS
  • Moody's response to the pandemic
  • SECTOR COMMENT
    25 May 2020|Moody's Investors Service
    On 20 May, the Bank of Italy provided an update on payment holidays for households and small and midsize enterprises (SMEs), and banks' origination of state-guaranteed loans to corporates. Italian banks' increased supply of corporate loans is credit positive because it will help mitigate Italy’s economic downturn, partially protecting banks' asset quality.
    SECTOR IN-DEPTH
    26 May 2020|Moody's Investors Service
    On 8 May 2020, the European Commission confirmed that the shareholders and subordinated creditors of banks that receive public support to help them withstand coronavirus-related pressures will not be required to bear losses through write-down or conversion to equity, as would normally be the case under European Union state aid rules.

    SECTOR IN-DEPTH
    18 May 2020|Moody's Investors Service
    The G-20 Debt Service Suspension Initiative (DSSI) announced on 15 April will free up resources for coronavirus-related spending, but at this stage is unlikely to ease the significant credit challenges that have been amplified by the coronavirus outbreak.

    SECTOR IN-DEPTH
    13 May 2020|Moody's Investors Service
     Multilateral developments banks (MDBs) play an important role in mitigating the economic and financial impact of the coronavirus pandemic on their borrowers. This report looks how MDB's responses to support vulnerable borrowers during the pandemic and the G-20 debt-relief initiatives may impact their credit metrics.

    SECTOR IN-DEPTH
    07 May 2020|Moody's Investors Service
    Major Latin American economies have put in place coronavirus support measures that include cash payments to low-income households, liquidity support for businesses and tax deferrals. But this support will not offset the rising recessionary momentum in the region or credit risks for most sectors.

    SECTOR COMMENT
    29 Apr 2020|Moody's Investors Service
    Fiscal and monetary authorities are increasingly stepping up the level of support to their respective economies. Fiscal measures include immediate support to households in the form of tax relief and transfers, credit lines and subsidies to businesses and explicit government guarantees on bank loans.

    SECTOR COMMENT
    27 Apr 2020|Moody's Investors Service
    On 23 April, the US Congress approved a coronavirus relief measure that will inject an additional $320 billion into the Paycheck Protection Program (PPP), a loan fund for small and midsize enterprises (SMEs) that exhausted its initial $349 billion in funding within two weeks of the program’s launch.

    SECTOR IN-DEPTH
    24 Apr 2020|Moody's Investors Service
    The G20 nations have confirmed their willingness to offer debt relief to low-income countries to allow them to devote scarce fiscal resources to vital humanitarian and economic remediation efforts during the coronavirus pandemic. However, calls for private-sector participation could lead to the suspension of payments on private-sector bonds and loans, which could represent a default according to Moody's definitions.

    SECTOR IN-DEPTH
    28 Apr 2020|Moody's Investors Service
    The measures, which include increased fiscal spending and targeted monetary easing, will help contain the damage to the Chinese economy from the coronavirus outbreak and facilitate modest economic recovery beginning in the second half of 2020.
    SECTOR COMMENT
    27 Apr 2020|Moody's Investors Service
    The rapid spread of the coronavirus will pressure RLGs by lowering tax revenues and increasing healthcare costs, although central government support will help to mitigate these effects.

    SECTOR IN-DEPTH
    23 Apr 2020|Moody's Investors Service
    The type of support governments offer companies to help ease the economic impact of the coronavirus outbreak could be very relevant for credit quality. If financial support comes without conditions, then it would be largely supportive of credit quality, even if in the broader context the support is not enough to avoid negative rating actions.