INSUBCONTINENT EXCLUSIVE:
The loan moratorium that India, China and other countries have implemented amid the Covid-19 crisis will give borrowers temporary relief,
but will restrain banks from taking proactive recovery action and could widen their credit losses once the directive is withdrawn, according
economies have enacted debt moratoriums to soften the liquidity crunch for businesses and households
restructuring and recovery actions
debt burden from already high levels.
According to the report, policy responses from the governments of the region will help mitigate
credit-negative pressures on companies, banks and the broader economy.
However, these efforts are unlikely to prevent deteriorating credit
is exposing vulnerabilities in existing systems and we expect policy space to be constrained for economies with existing fiscal challenges
accounted for by direct government spending is relatively modest and most support takes the form of indirect measures, such as
be the most likely to receive direct financial assistance and benefit from other measures.
Packages for small and medium enterprises have
largely taken the form of tax breaks, discounts and exemption
Such measures help to alleviate short-term liquidity constraints but do not directly compensate for revenue lost during shutdowns, the
