NBS and financial sector response to the coronavirus pandemic

13. 03. 2020 | Press Release of the NBS

  •        Coordinated action of the central bank and financial sector to ensure the operationality of commercial banks and provision of customer services
  •        Temporary easing of regulatory rules in order to support economic stability
  •         Stress testing of banks to be postponed until next year

In regard to minimising the impact of the coronavirus (COVID-19) pandemic on the Slovak economy and financial sector, Národná banka Slovenska is closely monitoring the evolving situation and is in continuous contact with financial institutions. This dialogue will continue with the aim of maintaining smooth business continuity.

In its role as Slovakia's financial supervisory authority, NBS will be using the available regulatory tools to adjust the operational, capital and liquidity requirements on banks in the coming period.  At the European level, agreement has been reached on the postponement until 2021 of an EU-wide stress test of banks planned for 2020.

"Národná banka Slovenska is consulting closely with the financial sector about the situation, and we are exchanging necessary information about current developments at the European level and in the Slovak financial sector," said Vladimír Dvořáček, Executive Director of the NBS Supervision and Financial Stability Division.

So far, the following capital relief measures will be available:

  •        Banks may partially meet Pillar 2 Requirements (P2R) using capital instruments that do not qualify as Common Equity Tier 1 (CET1) capital.
  •        Banks will be allowed to operate temporarily below the level of capital defined by the Pillar 2 Guidance (P2G).
  •        Banks may, in duly  justified cases, temporarily operate below the level of capital defined by the capital conservation buffer (CCB), which is currently set at 2.5%.

In the area of liquidity, banks will also, where justified, be temporarily exempted from full compliance with the liquidity coverage ratio (LCR).

NBS will be implementing these measures as part of a coordinated approach with the European Central Bank (ECB) and the European Banking Authority (EBA), in order to support the European and Slovak economies. Banks, for their part, are expected to use this temporary operational relief for the sole purpose of supporting and stabilising the economy.

NBS is also monitoring measures taken by certain banks, including the decision to waive fees for repayment deferrals of between one and six months where such deferral is warranted by the customer's impaired financial situation. Banks are, however, still required to maintain prudential and appropriate credit standards as well as adequate rules for identifying non-performing exposures.

As regards the conduct of NBS on-site inspections of supervised institutions in the financial sector, individual activities will be postponed and modified so as to focus inspections on institutions' most important operations. Inspections of remedial measures will take into account the institution's specific situation, with emphasis on ensuring the operation of critical functions. We are ready to make a further reassessment of ongoing or planned supervisory activity, as the situation requires.

In order to ensure the acceptance of the measures needed to maintain continuity of services during the pandemic, NBS is in communication with the Slovak banking sector, Slovak Banking Association, and representatives and associations from other sectors of the Slovak financial market.

Today, NBS and financial institutions in Slovakia have adopted a number of measures related to the coronavirus outbreak. As a result, opening hours for the public will be shortened, meetings and business trips will be kept to a minimum, and those staff whose work can be performed remotely will work from home. At the same time, financial institutions are committed to ensuring that their core customer services continue operating as smoothly as possible.

NBS Communications Section

National Bank of Slovakia
Communications Section
Imricha Karvasa 1, 813 25 Bratislava, Slovak Republic
Tel.: +421-2-5787 2142, +421-2-5865 2142, +421-2-5787 2169, +421-2-5865 2169
Internet: http://www.nbs.sk

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