February 23, 2018

EBA published an Opinion after the NBB notified EBA about its intention to modify capital requirements to address an increase in macro-prudential risk. Based on the evidence that NBB submitted, EBA does not object to the adoption of the proposed measure, which is based on Article 458 (2) of the Capital Requirements Regulation (CRR). This new measure aims to enhance the resilience of Belgian banks to potential severe downward corrections in the residential real estate markets.

The new macro-prudential measure that NBB intends to introduce is based on two components. The first component consists of a flat 5 pp risk-weight add-on to the micro-prudential risk-weight for mortgage exposures for internal ratings based (IRB) banks (identical to the measure that expired in May 2017). The second one is a more targeted component that would further increase risk-weights in line with the risk profile of the mortgage portfolio of the bank by applying an additional proportional 33% macro-prudential risk-weight add-on on top of the micro-prudential risk-weight, which is to be applied to the (residential) mortgage portfolio of each (IRB) bank. The EBA Opinion is addressed to the Council, the EC, and the NBB. EBA acknowledges, in line with the ESRB warning on the vulnerabilities of the residential real estate sector, that the combined increase in house prices and debt levels could pose a threat to the financial stability of banks in Belgium in case of a downturn. In light of this conclusion, EBA does not object to the deployment, by the NBB, of this proposed macro-prudential measure. 

 

Related Links

Keywords: Europe, EU, Banking, Macro-Prudential Risk, Belgium, CRR, Mortgage Exposures, Risk Weights, EBA

Related Articles
News

FSB to Evaluate Effects of Too-Big-To-Fail Reforms for Systemic Banks

FSB is seeking feedback as part of its evaluation of the effects of the too-big-to-fail reforms for banks.

May 23, 2019 WebPage Regulatory News
News

APRA Releases Minor Changes to Reporting Standards on SA-CCR for Banks

APRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).

May 22, 2019 WebPage Regulatory News
News

APRA on Industry Self-Assessments into Governance and Accountability

APRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).

May 22, 2019 WebPage Regulatory News
News

PRA Consults on Maintenance of TMTP Under Solvency II

PRA published a consultation paper (CP11/19) that sets out its approach to update supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTP) under Solvency II.

May 22, 2019 WebPage Regulatory News
News

APRA Proposes to Amend Guidance on Residential Mortgage Lending

APRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.

May 21, 2019 WebPage Regulatory News
News

IASB Proposes Improvements to IFRS 9 and IFRS 16

IASB published the exposure draft ED 2019/2 that proposes amendments to four IFRS standards, including IFRS 9 on Financial Instruments and IFRS 16 on Leases.

May 21, 2019 WebPage Regulatory News
News

Denis Beau of BDF on Supervisory Priorities for Climate-Change Risks

Denis Beau, the First Deputy Governor of BDF, delivered opening remarks at the BCBS-BSCEE-FSI High-level Meeting for Europe on banking supervision.

May 21, 2019 WebPage Regulatory News
News

ISDA CDM to be Deployed for UK Digital Regulatory Reporting Pilot

ISDA announced deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support the UK FCA, BoE, and participating financial institutions in testing phase two of the Digital Regulatory Reporting pilot for derivatives.

May 21, 2019 WebPage Regulatory News
News

MAS to Consolidate Regulation of Merchant Banks Under Banking Act

MAS published a consultation paper that proposes to consolidate the regulation of merchant banks under the Banking Act and to move merchant banks to a licensing regime under the MAS Act.

May 21, 2019 WebPage Regulatory News
News

ESAs Amend Technical Standards on Mapping of ECAIs Under CRR

ESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).

May 20, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3118