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Reciprocation of the German systemic risk buffer

Supervision consultation

Published: 29 August 2022

The ESRB has recommended the reciprocation of a macroprudential measure taken by the German Federal Financial Supervisory Authority. DNB intends to reciprocate this measure in order to prevent the materialization of negative cross-border effects in the form of leakages and regulatory arbitrage.

Details of the measure

The measure consists of a 2 % systemic risk buffer rate on all exposures (i.e. retail and non-retail exposures) to natural and legal persons that are secured by residential real estate located in Germany. The measure applies to (i) credit institutions using the IRB approach for calculating their risk-weighted exposure amounts for exposures secured by residential immovable property located in Germany, and (ii) credit institutions using the SA for calculating their risk-weighted exposure amounts for exposures fully and completely secured by residential immovable property that is located in Germany.

Applicability of the measure

As a result of reciprocation, this measure would be applicable to the relevant exposures of branches of Dutch credit institutions in Germany and to relevant cross-border exposures of these Dutch credit institutions to Germany. An institution-specific threshold of EUR 10 billion applies. The measure becomes binding when credit institutions’ relevant sectoral exposures through branches and direct cross-border exposures exceed this threshold. The German measure is applied under Article 133 of Directive 2013/36/EU (CRD).

Responding to the consultation

Interested parties are invited to respond until 1 October 2022, and raise, for instance, possible issues with respect to the implementation and application of the measure. During the consultation period, responses can be sent to: consultatie-reciprociteit@dnb.nl. A reaction to the consultation will be made public, unless stated otherwise by the respondent.

Additional information

For more information about reciprocity and measures reciprocated by DNB, click here.

For more information on the measure and the ESRB recommendation to reciprocate it, click here.

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