The European Banking Authority (EBA) has published its final draft amending technical standards on factors for assessing the appropriateness of real estate risk weights, aligned with CRR 3 updates.
The European Banking Authority (EBA) has published its final draft amending Regulatory Technical Standards (RTS) concerning the factors to be considered by national authorities when assessing the appropriateness of real estate risk weights.
This review is driven by the revised Capital Requirements Regulation (CRR 3), which introduces a new mandate for the EBA regarding the Standardised Approach of credit risk.
The assessment of CRR3 changes to the treatment of exposures secured by immovable property under the Standardised Approach identified only one amendment: updating legal references to align with the new banking framework.
The original RTS also addressed the appropriateness of minimum loss given default (LGD) values for retail exposures secured by immovable property under the IRB approach. To simplify and ensure regulatory consistency, the EBA proposes to align the RTS legal references to the IRB with CRR3.
These final draft RTS have been developed under Article 124(11) of Regulation (EU) 2024/1623 (CRR3), which mandates the EBA, in cooperation with the European Systemic Risk Board, to specify the factors considered for assessing the appropriateness of risk weights.
