The European Banking Authority (EBA) launched today a consultation on Regulatory Technical Standards (RTS) on specialised lending exposures. The proposed RTS aim to specify how institutions should take into account several factors when assigning risk weights to specialised lending exposures and how they should treat these factors. The consultation runs until 11 August 2015.
Specialised lending is a type of exposure towards an entity specifically created to finance or operate physical assets, where the primary source of income and repayment of the obligation lies directly with the assets being financed.
The proposed RTS define four classes of specialised lending: project finance, real estate, object finance, and commodities finance. For each of these four classes, the draft RTS specify a list of factors that institutions shall take into account and propose two options on how these factors should be combined in order to determine the risk weight assigned to the specialised lending exposure.
The approach followed in these RTS is in line with the Basel framework, which uses the so-called ‘supervisory slotting criteria’ approach under which specialised lending exposures are classified into categories depending on the underlying credit risk.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 11 August 2015. All contributions received will be published following the end of the consultation, unless requested otherwise.
A public hearing will take place at the EBA premises on 06 July 2015 from 12:00 to 14:00 UK time.
These draft RTS have been developed on the basis of Article 153 (9) of Regulation (EU) No. 575/2013 (Capital Requirements Regulation – CRR), which mandates the EBA to specify how institutions shall take into account certain factors when assigning risk weights to specialised lending exposures.
- Association for Financial Markets in Europe (AFME)
- British Bankers Association
- British Property Federation
- CREFC Europe
- Czech Banking Association
- Division Bank and Insurance Austrian Federal Economic Chamber
- French Banking Federation
- Grosvenor Group Limited
- Gruppo MPS
- Loan Market Association
- Portuguese Banking Association (APB)
- Standard Chartered Bank