Regulatory Forbearance and its Application in the Banking System during the COVID-19 Pandemic: Jurisdictional Experiences

This paper provides an overview of regulatory forbearance and its jurisdictional application in the banking system during the COVID-19 Pandemic. Over the years, regulatory forbearance has been used in the banking system and in recent times, it was prominently brought to the fore during the Pandemic as some banking system regulators applied it to cushion the adverse impact of the Pandemic on the sector and economy. The paper is descriptive in nature and draws on existing literature to explain the concept of regulatory forbearance, the types and those applied by regulators in some climes during the Pandemic. It also discusses the rationale for the use of regulatory forbearance such as financial stability and consumer protection, the challenges associated with it and how measures like stringent conditions can be instituted to ensure its effectiveness.