The National Bank of Romania (“NBR”) together with the Romanian Government have responded swiftly to the economic shock created by the COVID-19 pandemic by announcing several measures aimed to alleviate the adverse impact of COVID-19 on individuals and small & medium-sized enterprises (“SMEs”) and short-term liquidity resulting from the decreasing business activities. EU Background The wide-spread of COVID-19 has generated significant challenges for the society and higher risks for the economic outlook. Under these circumstances, on March 12, 2020, the European Banking Authority (“EBA”) issued a press statement[1] regarding a series of actions aimed to mitigate the impact of COVID-19 on the EU banking sector. The key takeaways: (i) EBA encourages competent authorities (“CA”, in Romania case, NBR) to make full use of flexibility embedded in existing regulations which are designed to be used in order to maintain soundness through crisis and provide critical functions to the economy and (ii) EU-wide stress test is postponed to 2021 in order to allow banks to prioritise operational continuity. Following the call for action[2] on March 12, EBA issued a second statement designed to explain some interpretative aspects on the functioning of the prudential framework regarding aspects related to (i) the classification of loans in default, (ii) the identification of forborne exposures and (iii) the accounting treatment.     Regarding the classification of loans in default/forborne exposures – EBA clarified that generalised payment deferrals, derived from legislative initiatives addressed to all borrowers do not automatically lead to a classification in default (in contrast with the 90 days past due criterion), forborne or unlikeness to pay, considering that individual assessment of the likeliness to pay is carefully carried on.     Regarding the accounting treatment – EBA considered that the application of public or private moratorium aimed to address the adverse economic of COVID-19 pandemic should not be considered by themselves as an automatic trigger to conclude that a significant increase in credit risk has occurred.

Introductory aspects It is a truism to say that the Mergers & Acquisitions will take a severe blow. Not only the private investments go hand in hand with the status of economy, predictability in laws making and good social and political climate, but investments are driven by other key-factors as well. Besides the purely legal side and behind the financial rationale, M&A projects are backed-up by various behaviours which generate enthusiasm, allowing one to have an appetite for spending or an appetite for taking risks.