This article analyses the practice of Covid-related bank regulatory forbearance measures
of eight East-Central European Union member states from the perspective of differentiated
integration. In line with the integration-deepening nature of the Single Supervisory
Mechanism, our expectation was that countries within the Banking Union (BU) would
impose harmonized forbearance measures, while non-BU members would use more discretional
measures. Indeed, the practice of forbearance measures is significantly more harmonized
within the BU than outside; however, there were also notable differences in the practice
of BU members. For non-BU member states, our expectation was that countries with the
intention of favouring their domestic financial system would ease regulatory requirements
more, while those that wanted to place the burden of the pandemic on foreign banks
would ease these requirements less. However, the analysis only partially confirmed
this expectation.
