EBA issues Opinion on measures to address macroprudential risk following notification by the Estonian Central Bank (Eesti Pank)
The European Banking Authority (EBA) published today an Opinion following the notification by the Estonian macroprudential authority, Eesti Pank, of its intention to extend a measure originally introduced in 2019 to ensure that banks hold sufficient own funds to cover systemic risks related to housing loans and to act as a backstop limiting any further decrease in risk weights. For credit institutions that operate in Estonia and use the internal ratings-based (IRB) approach, the measure introduces a minimum level for the average risk weight for residential mortgage loans to obligors residing in Estonia. Based on the evidence submitted, the EBA does not object to the extension of the proposed measure, which will be applied for two years.