On Oct. 7, POL GVT issued draft reg repealing higher risk weight reg.
POL GVT issued draft regulation 893 repealing the regulation on higher risk weight for exposures secured by mortgages, as amended.
Follows POL GVT Jul. 2023 issued draft reg on a higher risk weight, see #180458.
Purpose
Repeal of the Regulation of May 25, 2017 on a higher risk weight for exposures secured by mortgages on real estate, as amended in 2023 (the MRiF Regulation).
CRR3 Reg 2024/1623 which applies on Jan. 1, 2025, will introduce a multiplier increasing the risk weights for exposures with currency mismatch, amounting to 1.5.
Simultaneous operation of the provisions of the CRR3 Reg and the current MRiF Reg seems unjustified, and therefore it will be necessary to repeal the MRiF Regulation.
The parliamentary Financial Stability Committee recommended that POL FSA adjusts the methodology for determining additional capital requirements for banks' own funds.
In such a way that it duly takes into account the situation of individual banks in the context of the legal risk associated with the portfolio of foreign currency housing loans.
Including the legal risk that may result from the potential costs of materialization that are related to the portfolio of already repaid housing loans taken in foreign currency.
The objectives of the MRiF Regulation may be pursued in the new legal status by directly applying the provisions of the CRR3 Reg; no need for a higher risk weight.
Effectiveness
The repealing regulation is planned to enter into force on Jan. 1, 2025.
Nov. 2024 Regulation Issued
On Nov. 25, 2024, POL GVT published Minister of Finance Regulation of Nov. 12, 2024 repealing reg on higher risk weight for exposures secured by mortgages on real estate.
It is based on art 128 sec 6a item 2 Banking Law 1997; Regulation of May 2017 on the cited topic will be repealed when new regulation enters into force i.e. on Jan. 1, 2025.
Regulators
POL GVT
Entity Types
Bank; MG Orig; Servicer
Reference
OG Poz 1723, PR, 11/25/2024; Reg 11/12/2024; CP, 10/7/2024; Rpl Reg 5/25/2017; CRD/CRR Dir 2013/36, Reg 575/2013; CRR3 Reg 2024/1623; Basel III
