ESP CB decided to reciprocate macroprudential measure approved by the POR CB.
Follows EU ESRB May 2024 issued Rec ESRB/2023/13 re Rec ESRB/2015/2, #113018.
Overview
It decided to reciprocate POR macroprudential measure with effect from Oct. 1, 2024.
Annual macroprudential policy decision adopted under powers conferred upon ESP CB, in CRD transposition by Law 10/2014 regulation, supervision, solvency of credit firms.
Reciprocal measure sets systemic risk buffer requirement for 3 banking groups at consolidated level, applicable to exposures to Portuguese residential real estate sector.
POR CB approved a 4% sectoral SyRB applicable to retail exposures to natural persons secured by residential real estate located in Portugal for which institutions use internal ratings-based (IRB) approach to calculate credit risk regulatory capital requirements.
Application of buffer is preventive, aims to address build-up of risk in residential real estate market in POR; applies from Oct. 1, 2024 reviewed at least every two years.
Recalls that, in 2023, POR CB notified this measure to EU ESRB which issued Recommendation ESRB/2023/11 containing a favourable assessment.
Context
ESP CB analyses on case-by-case basis requests for reciprocation of macro measures by authorities of other EU States that affect banking sector, endorsed by EU ESRB.
In all cases analyzed to date, it had found that volume of Spanish banks’ exposures to countries requesting reciprocity stood well below pre-defined materiality thresholds.
In addition, no other reasons calling for reciprocation of macroprudential measures identified and, therefore, the ESP CB had not acted on any reciprocation requests.
Other Aspects
Re this POR measure, ESP CB, as the designated authority to adopt measures on the macroprudential capital buffer, considered advisable to act on EU recommendation.
That, taking into account materiality of Spanish banks’ exposures to POR residential real estate market, reasons for contributing to effectiveness of measure in Portugal.
Decided to set sSyRB of 4% for 3 banks at consolidated level (Table 1), on their retail exposures to natural persons secured by residential real estate located in Portugal.
Effectiveness
The buffer will apply from Oct. 1, 2024.
Regulators
ESP CB
Entity Types
Bank; BHC; SIFI
Reference
Dec, PR, 5/17/2024; ESRB/2023/11; CRD/CRR Dir 2013/36, Reg 575/2013
