ESRB published, in the Official Journal of European Union, a recommendation (ESRB/2019/3) on closing real estate data gaps in EU. ESRB/2019/3 amends the recommendation ESRB/2016/14, which aims to harmonize the definitions and indicators used for monitoring residential real estate (RRE) and commercial real estate (CRE) markets and address the existing gaps in availability and comparability of data on RRE and CRE markets in EU.
The implementation of a framework for monitoring developments in the real estate sector for financial stability purposes requires regular collection and distribution, at EU level, of comparable country data so that the real estate-related risks across member states can be more accurately assessed and the use of macro-prudential policy instruments can be compared. The statistical work most recently conducted by the ESCB Statistics Committee—assisted by its Real Estate Task Force—on the sources of data on indicators related to the financing of CRE and RRE has highlighted the need for amendments to certain definitions to facilitate the monitoring activities of national macro-prudential authorities. Thus, the definitions of CRE and of RRE in Recommendation ESRB/2016/14 needed to be amended to align them more closely with the broader definitions used in AnaCredit Regulation (EU 2016/867), with the aim to facilitate the required financial stability analyses and to allow for full comparability across countries.
Additionally, to ensure the implementation of Recommendation ESRB/2016/14, it is necessary to extend certain deadlines set forth therein. The lack of commonly agreed working definitions of the relevant indicators on the physical CRE market is of a particular concern, which combined with the operational constraints on data availability makes it difficult to accurately assess and compare risks across national markets. Therefore deadlines for the implementation of Recommendation ESRB/2016/14 in relation to the indicators for which national macro-prudential authorities do not have the relevant information needed to be extended further, to allow sufficient time for the development of the necessary definitions and for data collection.
ESRB acknowledges that further technical guidance and work on the target definitions and indicators may be required to accommodate the specificities of markets or market segments and to ensure the statistical quality of data. Further amendments to Recommendation ESRB/2016/14 may, therefore, also be necessary to address future developments regarding those target definitions and indicators. Given the above-mentioned issues, Recommendation ESRB/2016/14 has been amended as follows:
- In Section 1, paragraph 1 of Recommendation C and paragraph 2 of Recommendation D has been replaced.
- Recommendation F has been added in Section 1.
- Section 2(1)(1) has been amended and Section 2(3) has been replaced.
- Annexes I, II, III, IV, and V to Recommendation ESRB/2016/14 have been replaced by Annexes I, II, III, IV, and V to Recommendation ESRB/2019/3.
Keywords: Europe, EU, Banking, Securities, Commercial Real Estate, Real Estate Data Gaps, Residential Real Estate, AnaCredit, Financial Stability, Recommendation, Macro-Prudential Policy, ESRB 2016/14, ESRB 2019/3, ESRB
Previous ArticleEC and SRB Sign MoU for Cooperation on Bank Resolution
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
PRA published a statement to insurers that clarifies the approach to application of the matching adjustment during COVID-19 crisis.
EBA published a report on the implementation of selected COVID-19 policies within the prudential framework for banking sector.
EC launched a consultation to revise the network and information systems (NIS) Directive (2016/1148), which was adopted in July 2016 and is the first horizontal internal market instrument aimed at improving the resilience of the EU against cybersecurity risks.
PRA published a statement that outlines its view on the implications of LIBOR transition for contracts in scope of the “Contractual Recognition of Bail-In” and “Stay in Resolution” parts of the PRA Rulebook.
PRA published the policy statement PS15/20 to reflect additional resilience associated with higher macro-prudential buffers in a standard risk environment with a reduction in Pillar 2A capital requirements.
BCBS published the eighteenth progress report on implementation of the Basel III regulatory framework in member jurisdictions.
FCA announced proposals that would provide continued support for certain consumer credit products to users, who are facing a financial impact because of the exceptional circumstances arising from the COVID-19 pandemic.
ACPR published a draft version of taxonomy RAN 1.4.0_PWD1, along with the related documentation, for Solvency II reporting.
BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).