Featured Product

    ESRB Concurs with NBB to Extend Macro-Prudential Measure for IRB Banks

    April 09, 2020

    ESRB published an opinion on the notification of NBB to extend application period of the macro-prudential measure to increase risk-weights for exposures of internal ratings-based banks to the Belgian residential real estate sector. NBB has proposed to extend this measure by one year, until April 30, 2021. ESRB supports this measure and considers that recent developments in the residential real estate sector in Belgium warrant an extension of the measure. This decision, including an NBB regulation and the enacting Royal Decree, will be published in April 2020.

    The measure consists of the imposition of a macro-prudential risk-weight add-on on all domestic credit institutions applying the internal ratings-based approach for their exposures to the residential real estate in Belgium. The first component of the add-on imposes a 5 percentage-point risk-weight add-on for the exposures of the internal ratings-based banks to Belgian mortgage loans. The second, more targeted, component further increases the risk-weights in function of the risk profile of the mortgage portfolio of the internal ratings-based banks, by applying a multiplier of 1.33 to the micro-prudential risk-weight of the residential mortgage loan portfolio. This measure was activated on May 01, 2018 and, in line with Article 458 of the the Capital Requirements Regulation or CRR, remains active for two years, until April 30, 2020. NBB intends to review the calibration and appropriateness of the measure in December 2020.

    ESRB believes that extension of the proposed measure is necessary to ensure resilience of Belgian banks to the systemic risk potentially materializing in the residential real estate market. NBB decided that the extension of the period of application of this measure by one year is required because the systemic risks identified when the measure was first introduced persist and bank exposures to the Belgian residential real estate market have further increased since 2018. This extension is necessary to maintain resilience of the banking sector and ensure sufficient loss-absorbing capacity from a macro-prudential perspective, commensurate with the exposure of the internal ratings-based banks to the residential real estate sector in Belgium. The extension of this measure is an integral part of a consistent set of complementary macro-prudential instruments activated in Belgium. 


    Related Links

    Keywords: Europe, EU, Belgium, CRR, Internal Ratings Based, Residential Real Estate, Opinion, Macro-Prudential Measures, Risk Weight Add-On, Systemic Risk, Credit Risk, RRE, IRB Approach, CRR2, CRD5, NBB, BNB, ESRB

    Featured Experts
    Related Articles

    EBA Launches Stress Tests for Banks, Issues Other Updates

    The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.

    January 31, 2023 WebPage Regulatory News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8700