Regulatory Alerts2025-01-01
Draft Regulatory Technical Standards on equivalent mechanism for unfinished property
The European Banking Authority proposes Regulatory Technical Standards to define an equivalent legal mechanism allowing unfinished residential properties to qualify for preferential risk weight treatment under the Capital Requirements Regulation. The standards require a completion guarantee issued by a regulated financial entity with sufficient creditworthiness, mandating that the provider either fully finances remaining construction costs or repays the loan if completion fails. These rules establish strict enforceability and activation conditions to ensure a harmonized prudential framework across the European Union.
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