Regulatory Alerts2021-05-27
Exposures to be Classified as High Risk
The Norwegian Financial Supervisory Authority issued circular 2/2021 to replace previous guidance and enforce a 150% risk weight for exposures associated with particularly high risk under Article 128 of the CRR. The document mandates that institutions classify venture capital investments, active equity, and financing of speculative real estate investments as high-risk, while also requiring a proactive identification of other risky exposures. It further clarifies the definition of speculative real estate financing based on EBA guidelines and specific interpretations from the Norwegian Ministry of Finance regarding pre-sales and project funding.
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