Consultation paper : draft regulatory technical standards on the conditions that competent authorities shall take into account when determining higher risk-weights, in particular the term of “financial stability considerations" under Article 124(4)(b) CRR and the conditions thet competent authorities shall take into account when determining higher minimum LGD values under Article 164(6) CRR

This consultation paper (CP) for these draft regulatory technical standards (RTS) sets out the conditions that competent authorities shall take into account when determining higher risk-weights for exposures secured by immovable property, in particular the term of “financial stability considerations”, and hence affect the capital requirements for banks applying the Standardised Approach (SA) to those exposures (Article 124(4)(b) CRR). Similarly, this CP for these draft RTS setsout the conditions that competent authorities shall take into account when increasing the minimum exposure weighted loss given default (LGD) for retail exposures secured by residential or commercial immovable property, hence affecting the capital requirements of banks applying the Internal Ratings Based (IRB) approach to those exposures (Article 164(6) CRR). Given the similar nature of the mandate in both Articles 124 and 164 CRR, these conditions are specified jointly in the CP for these draft RTS.