Regulatory Alerts2025-01-01
EBA Guidelines on ADC exposures to residential property under CRR Article 126a
The European Banking Authority issued guidelines specifying the credit risk-mitigating conditions required for institutions to apply a 100% risk weight to Acquisition, Development, and Construction exposures to residential property instead of the standard 150%. The document defines precise thresholds for substantial cash deposits, equivalent financing, obligor-contributed equity, and the significant portion of total contracts, including a specific optional framework for public housing entities. These rules aim to harmonize the treatment of ADC exposures across the EU to ensure comparability of own funds requirements and a level playing field.
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