(Finance) – Recommendation ESRB/2023/4 of the European Systemic Risk Board (ESRB) invites the authorities of the Member States of the European Economic Area to recognize a Swedish macroprudential measure time to contain banks’ risks towards the real estate market of that country.
The measure provides, for Swedish banks that use internal models for the purpose of calculating prudential requirements for credit risk, the application of a average weighting of the exposure portfolio towards companies guaranteed by properties located in Sweden equal to at least 35 percent if for commercial use and 25 percent if for residential use.
The recommendation calls on the authorities of the Member States to adopt the same measure macroprudential or an equivalent one if the same measure is not available in national legislation. The recommendation allows national authorities to exempt banks whose exposures are below the materiality threshold established in the recommendation (equal to 5 billion SEK) and not to introduce the measure if all intermediaries resident in the respective countries have exposures below the threshold .
The exposures of Italian banks to the risks indicated by the Swedish authority are lower than the threshold established in the recommendation. The Bank of Italy has therefore decided not to introduce the measure adopted by the Swedish authority in our country; however, it will continue to carry out periodic checks on the exposures of Italian banks and may change this decision if circumstances so require.