ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, Finland, France, and Sweden. The General Board of ESRB decided to exclude the Finnish macro-prudential measure for risk-weight on residential mortgage loans from the list of macro-prudential policy measures that are recommended to be reciprocated in Recommendation ESRB/2015/2. ESRB also amended text on the reciprocation of certain macro-prudential measures from Belgium, France, and Sweden. In this context, the Recommendation ESRB/2020/16, which amends Recommendation ESRB/2015/2, has been published in the Official Journal of the European Union. Recommendation ESRB/2020/16 entered into force on January 01, 2021.
On January 08, 2018, the Recommendation ESRB/2015/2 (pursuant to Recommendation ESRB/2018/1) was amended to recommend the reciprocation of a 15% floor for the average risk-weight on residential mortgage loans secured by a mortgage on housing units in Finland. This measure was applied by FIN-FSA in accordance with the Capital Requirements Regulation or CRR, to the Finland-authorized credit institutions that use the internal ratings-based, or IRB, approach to calculate regulatory capital requirements. On September 30, 2020, FIN-FSA decided not to renew the risk-weight floor from December 31, 2020. In tandem with this FIN-FSA decision, the General Board of ESRB has decided to exclude the Finnish measure from the list of macro-prudential policy measures that are recommended for reciprocation under the Recommendation ESRB/2015/2. Therefore, the Recommendation ESRB/2015/2 has been amended accordingly. To this end, the Annex of Recommendation ESRB/2020/16 replaces the Annex of the Recommendation ESRB/2015/2.
Moreover, the Recommendation ESRB/2020/16 replaces Section 1, sub-recommendation C(1), of the Recommendation ESRB/2015/2 with respect to the following:
- Belgium—A risk-weight add-on for retail exposures secured by residential immovable property located in Belgium, applied (in accordance with the CRR) to credit institutions authorized in Belgium, using the IRB, Approach for calculating regulatory capital requirements and composed of a flat risk-weight add-on of 5 percentage points and a proportionate risk-weight add-on consisting of 33% of the exposure-weighted average of the risk-weights applied to the portfolio of retail exposures secured by residential immovable property located in Belgium
- France—A tightening of the large exposure limit provided for in CRR, applicable to exposures to highly indebted large non-financial corporations having their registered office in France to 5% of eligible capital, applied to global systemically important institutions (G-SIIs) and other systemically important institutions (O-SIIs) at the highest level of consolidation of their banking prudential perimeter
- Sweden—A credit institution-specific floor of 25% for the exposure-weighted average of the risk-weights applied to the portfolio of retail exposures to obligors residing in Sweden, secured by immovable property in accordance with CRR to credit institutions authorized in Sweden using the IRB Approach for calculating regulatory capital requirements
Keywords: Europe, Belgium, Finland, France, Sweden, Banking, Systemic Risk, ESRB/2015/2, Reciprocity, Recommendation, ESRB/2020/16, Macro-Prudential Policy, Regulatory Capital, Basel, ESRB
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
ISDA is consulting on the implementation of fallbacks for the sterling LIBOR ICE Swap Rate and for the USD LIBOR ICE Swap Rate.
BIS and BoE launched the BIS Innovation Hub Center in London, which is the fourth new Innovation Hub Centre to be opened in the past two years.
ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, France, Luxembourg, Norway, and Sweden.
SEC announced that the Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions.
EC published the Delegated Regulation 2021/931, which supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to the regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver.
BCBS is consulting on preliminary proposals for the prudential treatment of cryptoasset exposures of banks.
EBA issued a revised list of validation rules under the implementing technical standards on supervisory reporting.
BIS Innovation Hub, BDF, and SNB announced that, together with a private-sector consortium led by Accenture, they will conduct an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement.
ESAs published two amended implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs).