Regulatory Alerts2022-03-30 | General Administrative Act ordering a capital buffer for systemic risks under section 10e of the KWGGeneral Administrative Act Ordering a Two Percent Capital Buffer for Systemic Risks in Residential Real Estate Financing Under Section 10e of the KWG
The Federal Financial Supervisory Authority (BaFin) has issued a General Administrative Act ordering a two percent capital buffer for systemic risks targeting residential real estate financing under section 10e of the German Banking Act (KWG). Effective April 2022, the measure applies to institutions and holding groups with exposures to natural or legal persons securing loans with mortgages on German residential property. By addressing structural risks from sustained price increases and rising household debt, the buffer complements existing countercyclical requirements to safeguard financial stability without disproportionately impacting lending.
Share