ESRB Amends Recommendation Related to Macro-Prudential Policy Measures
ESRB published the Recommendation ESRB/2019/1, which amends Recommendation ESRB/2015/2 on the assessment of cross-border effects of, and voluntary reciprocity for, macro-prudential policy measures. To ensure effective and consistent national macro-prudential policy measures, it is important to complement the mandatory reciprocity required under Union law with voluntary reciprocity. The framework on voluntary reciprocity for macro-prudential policy measures set out in Recommendation ESRB/2015/2 aims to ensure that all exposure-based macro-prudential policy measures activated in one member state are reciprocated in the other member states.
In April 2018, in accordance with Article 133(10)(b) of Capital Requirements Directive (CRD IV: Directive 2013/36/EU), Bank of Estonia reviewed the systemic risk buffer and reset the systemic risk buffer rate applicable to the domestic exposures of all credit institutions authorized in Estonia at 1%. Following the request by Bank of Estonia to ESRB, the General Board of ESRB has decided to recommend a maximum materiality threshold of EUR 250 million of exposures located in Estonia to steer the application of the de minimis principle by the reciprocating member state to the reciprocation of the 1% systemic risk buffer set by Estonia, which was recommended for reciprocation by ESRB pursuant to Recommendation ESRB/2016/4.
Furthermore, from December 31, 2018, credit institutions authorized in Sweden and using the Internal Ratings Based Approach for calculating regulatory capital requirements are subject to 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. Following the request by Financial Supervisory Authority in Sweden (Finansinspektionen) to ESRB, the General Board of ESRB has decided to include this measure in the list of macro-prudential policy measures that are recommended to be reciprocated under Recommendation ESRB/2015/2. The General Board of ESRB has also decided to recommend a maximum materiality threshold of SEK 5 billion of exposures to obligors residing in Sweden secured by immovable property to steer the application of the de minimis principle by the reciprocating member state. Therefore, Recommendation ESRB/2015/2 has been amended as follows:
- In Section 1, sub-recommendation C(1) has been replaced.
- Annex to Recommendation ESRB/2015/2 has been replaced by Annex to Recommendation ESRB/2019/1.
Related Links
Keywords: Europe, EU, Sweden, Estonia, Banking, Macro-Prudential Policy Measures, ESRB/2019/1, ESRB/2015/2, Voluntary Reciprocity, Systemic Risk Buffer, CRD IV, ESRB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
CNB Publishes Financial Stability Report for 2018–19Related Articles
PRA and FPC Finalize Changes to Leverage Ratio Framework in UK
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
CFPB Proposes Rule on Small Business Lending Data Collection
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
PRA Decides to Maintain O-SII Buffers for Another Year
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
FSB Report Assesses Implementation of Recommendations on Stablecoins
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
APRA Updates Loan Serviceability Expectations for Home Lending
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
CPMI and IOSCO Consult on Guidance on Stablecoin Arrangements
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
EBA and EIOPA Set Out Work Priorities for 2022
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
MFSA Issues Reporting Updates and Guidance for Banks
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
EC Publishes Decision on List of Equivalent Third Countries Under CRR
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC Rule on Contractual Recognition of Write-Down and Conversion Powers
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.
