Commission Delegated Regulation (EU) 2023/206 of 5 October 2022 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards specifying the types of factors to be considered for the assessment of the appropriateness of risk weights for exposures secured by immovable property and the conditions to be taken into account for the assessment of the appropriateness of minimum loss given default values for exposures secured by immovable property (Text with EEA relevance)

New Commission Delegated Regulation (EU) 2023/206 specifying the factors national competent authorities (NCAs) shall take into consideration when evaluating the appropriateness of an institution’s assigned „risk weights for exposures secured by immovable property“ and the appropriateness of an institution’s „loss given default values for exposures secured by immovable property“ was published in the Official Journal (OJ) of the EU.
In the first context, the evaluation of an institution’s assigned „risk weights for exposures secured by immovable property“, the Delegated Regulation primarily requires NCAs to take into account loss experience of exposures secured by both residential and commercial immovable property and forward-looking immovable property market developments which primarily consist of macro-economic indicators such as the demand and supply in the residential and commercial property market or the expected housing price developments.
In the second context, the evaluation of an institution’s „loss given default values for exposures secured by immovable property“, the Delegated Regulation primarily requires NCAs to take into account macro-economic indicators such as those noted above and measures that may have been put in place by NCAs to mitigate credit risk of financial institutions. Such measures could include, for instance, the imposition of loan-to-value limits or debt-to-income limits on financial institutions.