(Finance) – The Bank of Italy recalled that the recommendation ESRB/2024/3 of the European Systemic Risk Board (ESRB) invites the authorities of the member states of the European Economic Area to recognize a Danish macroprudential measure aimed at containing banks’ risks towards the real estate sector of that country.
The measure provides for the obligation to hold a capital buffer against systemic risk (Systemic Risk Buffer, SyRB) of 7 percent of risk-weighted assets relating to exposures, secured and unsecured, to Danish non-financial companies operating in the real estate sector and in the development of real estate projects.
The Recommendation calls on authorities in European Economic Area countries to take similar measures with respect to banks in their jurisdictions, but allows exemptions for institutions for which the affected exposures are less than 200 million euros or not to adopt the measure if all intermediaries have exposures lower than this threshold.
The exposures of Italian banks to the risks indicated by the Danish authority are negligible. The Bank of Italy, therefore, has decided not to recognize the measure; it will however continue to carry out periodic checks on the exposures of Italian intermediaries to Denmark and may change this decision if circumstances require it.