Consultation Regulation on risk weighting for mortgage loans
On 15 October 2019 we launched the public consultation about the introduction of a minimum floor for risk weighting of mortgage loans granted to private individuals in the Netherlands – the Regulation on risk weighting for mortgage loans (Regeling risicoweging hypothecaire leningen). The consultation will end on 25 November 2019. The consultation version can be downloaded below.
In the Regulation we oblige banks using internal models to apply a minimum floor to their risk weighting of domestic mortgage loan portfolios. We also explain how they must calculate the floor. In taking this measure, we use one of the options and discretions provided by the Fourth Capital Requirements Directive (CRD IV) and the Capital Requirements Regulation (CRR), specifically Article 458 of the CRR. The Regulation providing specific rules regarding CRD IV and the CRR 2019 will be amended to reflect this.
The main reason why we will be taking this measure is that we found that the risk weights which banks currently assign to their mortgage loans based on their internal models insufficiently reflect the increased systemic risk inherent in the Dutch housing market. The measure aims to bolster the banks’ resilience against a potential housing market correction. More details are provided in the autumn 2019 edition of our Financial Stability Report.
Let us know what you think
You can submit your response by email at email@example.com, stating “Consultation response to Regulation on risk weighting for mortgage loans” in the subject line. The deadline for submitting responses is 25 November 2019.
We will issue a general feedback statement after we have processed the responses. Unless you state otherwise, we will assume that you do not object to publication of anonymised responses. The definitive version of the Regulation will be published in the Government Gazette.
Consultation version Regulation risk weighting for mortage loans