Definition of moratorium

1. condition when a borrower declares inability to repay some or all of an outstanding debt, or ceases paying the debt service-interest -on a loan. If declared by a sovereign borrower, it generally leads to rescheduling of the loan with a longer term. See also sovereign risk.
2. legal moratorium on a proposed activity, for example the one-year moratorium in the Competitive Equality Banking Act of 1987 on securities underwriting by bank holding company affiliates.

1. time period during which a certain activity is not allowed.
2. delay granted in the repayment of a debt or in the fulfillment of another legal obligation.

a time period during which a certain activity is not allowed.

Example: Fair City passes an ordinances that establishes a 6-month moratorium on condominium conversions. During the period, no one may legally convert an apartment complex into condominium units.