The note recalls CRR was incorporated into EEA Agreement and implemented in Norwegian law in Regulation 1997/2014 (CRR/CRD regulations) §2 first paragraph.
CRRs implemented by incorporation (reference to EU regs) in CRR/CRD Regulation 197/2014 §2, CRR3 is envisaged to follow the same path.
CRR3 has more risk-sensitive standard method, restricts IRB use for certain portfolios.
Banks with significant proportion of mortgages in portfolio that use standard method, have lower capital requirements for mortgages with low to moderate LTV ratio.
Lower capital requirements for loans with mortgages on commercial property can also contribute to overall lower capital requirements for the standard method banks.
IRB banks with significant lending to large enterprises may have stricter capital requirements when have to use regulatory LGD estimates instead of own estimates.
Banks that are not permitted to use their own LGD estimates will have lower capital requirements as the regulatory LGD estimates are reduced.
Other IRB banks are expected to have lower capital requirements as a result of the removal of adjustment factor in risk weighting formula.
New capital requirement floor for IRB banks not binding in 1st years of transition scheme, assumed to have modest effect for most banks after transition ends in 2032.
Changes in weighting rules for operational risk expected to reduce capital requirement.
Rules changes for market, CVA risk expected to have less significance for NOR banks.
Yet, overall effects on capital requirements is uncertain, affected by national choices.
Introducing requirement to report information to be made public to EBA will mean that largest Norwegian banks must report to the EBA.
S2, para 1, new k refers to Reg 2024/1623, S5 title is Common Equity Tier 1 capital.
Further amendments are made; the regulation will enter into force at a later date.
EEA Decision 291/2024 of Dec. 6, 2024 amended Annex IX (Financial services) to EEA Agreement to include in Point 14a (Reg 575/2013) reference to Reg Reg 2024/1623.
In force on Jan. 1, 2025, if all notifications under art 103.1 EEA Agreement are made.
Dec. 9, 2024 IRB Floor
On Dec. 9, 2024, NOR GVT published FOR-2024-12-06-2951 regulations on changes in regulations on capital requirements and implementation of the CRR/CRD regulations (IRB floor for risk weighting of property loans), in force on Jan. 1, 2025.
Regulators
EFTA; NOR GVT
Entity Types
Bank; MG Orig
Reference
OG 2024-1332, 12/9/2024; FOR-2024-12-06-2951, 12/6/2024; OG 2024-1333, FOR-2024-12-06-2952, 12/9/2024; Dec 291/2024, 12/6/2024; Nt 11/27/2024; Reg 1097/2014; CRR/CRD Reg; CRR3 Reg 2024/1623; EEA Agreement; Citation: FOR-2024-12-06-2952; FOR-2024-12-06-2951;
