Measures recommended for reciprocity to Recommendation ESRB/2015/02 between 2017 – 2022

In order to ensure a level playing field framework and to avoid regulatory arbitrage in the single market, the European Systemic Risk Board (ESRB) recommends that national macroprudential authorities recognize the macroprudential measures adopted by other Member States on the basis of ESRB Recommendation / 2015 / 2 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures. According to the principle of reciprocity through voluntary recognition provided by the European regulatory framework, NCMO may recognize the measures adopted by other Member States, which is equivalent to the application of those measures or similar measures by credit institutions in Romania that provide financial services in that Member State directly or through branches.

The table below summarizes the measures recommended for reciprocity in Recommendation ESRB / 2015/02 with subsequent amendments, as well as the decision adopted by NCMO on the appropriateness of their recognition by voluntary reciprocity.

Country

Measure

Materiality threshold

Timeframe for validity

The decision of the NCMO[1]

Belgium

Introduction of a 9 per cent systemic risk buffer rate on all IRB retail exposures secured by residential immovable property for which the collateral is located in Belgium.

EUR 2 billion, at the level of each credit institution.

01.05.2022

present

During the meeting of June 28, 2022, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Belgium, given that the eligible exposures of the local banking sector to this country are immaterial.

Lithuania

Implementation of a 2 per cent systemic risk buffer rate on all retail exposures to natural persons resident in the Republic of Lithuania, which are secured by residential real estate.

EUR 50 million (materiality threshold set for the amount of exposures arising from loans granted to borrowers in Lithuania)

01.06.2022

present

During the meeting of March 31, 2022, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Lithuania, given that the eligible exposures of the local banking sector to this country are immaterial.

The Netherlands

Introduction of a minimum average risk weight applied by credit institutions using the internal ratings-based (IRB) approach in relation to their portfolios of exposures to natural persons secured by residential property located in the Netherlands.

EUR 5 billion, at the level of each credit institution

01.01.2022

present

During the meeting of March 31, 2022, the NCMO decided not to voluntarily reciprocate the macroprudential measure of the Netherlands, given that the eligible exposures of the local banking sector to this country are immaterial.

Luxembourg

Legally binding loan-to-value (LTV) limits for new mortgage loans on residential real estate located in Luxembourg, with different LTV limits applicable to different categories of borrowers:

(i) LTV limit of 100 per cent for first-time buyers acquiring their primary residence;

(ii) LTV limit of 90 per cent for other buyers i.e. non first-time buyers acquiring their primary residence. This limit is implemented in a proportional way via a portfolio allowance. Specifically, lenders may issue 15 per cent of the portfolio of new mortgages granted to these borrowers with an LTV above 90 per cent but below the maximum LTV of 100 per cent;

(iii) LTV limit of 80 per cent for other mortgage loans (including the “buy-to-let” segment).

• EUR 350 million (1 percent of the total Luxembourg real estate market)

OR

•EUR 35 million (institution-specific materiality threshold for total cross-border mortgage loans to Luxembourg)

01.01.2021

present

During the meeting of June 3, 2021, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Luxembourg, given that the eligible exposures of the local banking sector to this country are immaterial.

Norway

Implementation of a 4.5 per cent systemic risk buffer rate for exposures in Norway.

NOK 32 billion, (materiality threshold set for risk-weighted exposures)

01.01.2020

present

During the meeting of June 3, 2021, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Norway, given that the eligible exposures of the local banking sector to this country are immaterial.

Norway

Introduction of a 20 per cent average risk weight floor for residential real estate exposures in Norway to credit institutions, using the IRB approach for calculating regulatory capital requirements.

NOK 32.3 billion (materiality threshold set for the amount of exposures from loans granted to Norwegian debtors)

01.01.2020

present

During the meeting of June 3, 2021, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Norway, given that the eligible exposures of the local banking sector to this country are immaterial.

Norway

Implementation of a 35 per cent average risk weight floor for commercial real estate exposures in Norway to credit institutions, using the IRB approach for calculating regulatory capital requirements.

NOK 7.6 billion (materiality threshold set for the amount of exposures arising from loans granted to Norwegian debtors)

01.01.2020

present

During the meeting of June 3, 2021, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Norway, given that the eligible exposures of the local banking sector to this country are immaterial.

France

A tightening of the large exposure limit, applicable to exposures to highly-indebted large non-financial corporations having their registered office in France to 5 per cent of Tier 1 capital. This measure is 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.

• EUR 2 billion for the total original exposures of domestically authorised G-SIIs and O-SIIs to the French non-financial corporations’ sector

OR

•EUR 300 million applicable to G-SIIs and O-SIIs, for exposures meeting certain conditions

OR

•A threshold of 5 per cent of the G-SII’s or O-SII’s Tier 1 capital at the highest level of consolidation, for exposures identified in the previous bullet

05.12.2019

present

During the meeting of June 6, 2019, the NCMO decided not to voluntarily reciprocate the macroprudential measure of France, given that the eligible exposures of the local banking sector to this country are immaterial.

Sweden

Implementation of a 25 per cent floor 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, to all credit institutions, using the IRB approach.

SEK 5 billion, at the level of each credit institution

15.01.2019

present

During the meeting of June 6, 2019, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Sweden, given that the eligible exposures of the local banking sector to this country are immaterial.

Belgium

Implementation of a risk-weight add-on for retail exposures secured by residential immovable property located in Belgium to all credit institutions using the IRB approach. The measure consists of: (i) a flat risk-weight add-on of 5 percentage points and (ii) a proportionate risk-weight add-on consisting of 33 per cent of the exposure-weighted average of the risk-weights applied to the portfolio of retail exposures secured by residential immovable property located in Belgium.

EUR 2 billion, at the level of each credit institution

16.07.2018

30.04.2022

During the meeting of December 17, 2018, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Belgium, given that the eligible exposures of the local banking sector to this country are immaterial.

Finland

Implementation of a 15 per cent risk-weight floor on residential mortgage loans in Finland for banks using the internal ratings-based approach (IRB) for calculating regulatory capital requirements.

EUR 1 billion, at the level of each credit institution

08.01.2018

31.12.2020

During the written procedure from June 26, 2018, the NCMO decided not to voluntarily reciprocate the macroprudential measure of Finland, given that the eligible exposures of the local banking sector to this country are immaterial.

 

[1] The relevant exposures to the measures in question will be monitored periodically, and the NBR will propose actions to be taken if they become significant.