Featured Product

    DNB Announces Amendment to Treatment of NHG-Backed Mortgage Loans

    November 19, 2019

    DNB issued a statement on an announcement by the Dutch Homeownership Guarantee Fund (Waarborgfonds Eigen Woningen—NHG) that NHG would provisionally compensate mortgage providers for the expected loss in the event of default. The amendment aims to demonstrate that NHG qualifies as eligible credit protection. This is of relevance to banks that use the standardized approach or elementary internal ratings-based approach to calculate their capital requirements for mortgage loans on residential property. The planned entitlement to a provisional payment is designed to meet the conditions set out in the Capital Requirements Regulation (CRR).

    The planned amendment to the terms and conditions of NHG means that banks acting as mortgage lenders and beneficiaries of the guarantee will be entitled to receive a provisional payment under the guarantee if the borrower of an NHG-backed loan should default. The amount of the payment will be based on a robust estimate of the bank's loss. It will also take into account any excess amount and depend on the coverage under the guarantee at the time of the default, according to the applicable terms and conditions. NHG will make the payment at the bank's request within 21 months of the default, provided all terms and conditions are met. Banks will have the option of receiving a provisional payment not only for new mortgage loans taken out under the modified terms and conditions but this will also apply to NHG-backed mortgage loans taken out previously.

    NHG expects that it will have completed the relevant legal documents and the associated processes in the first quarter of 2020, after which the planned amendments will take effect. Until that time, DNB will use its discretionary power referred to in Article 215(2)(b) of the CRR to qualify NHG as eligible credit protection under the standardized or elementary internal ratings-based approach. It will do so because of the NHG's rapid payment of NHG-backed losses, the rapid handling of loss claims, the high payout ratio, and the objection procedure for rejected loss claims. This applies to banks that are under the direct supervision of DNB.

     

    Related Link: Press Release

    Keywords: Europe, Netherlands, Banking, Internal Ratings Based, Standardized Approach, Expected Loss, CRR, NHG-Backed Loans, Capital Requirements, NHG, Credit Risk, Basel III, DNB

    Featured Experts
    Related Articles
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7868