Risk weights on real estate exposures

In 2016, the Comité du Risque Systémique (CdRS) provided an opinion and a recommendation regarding the risk weights applied to retail exposures (non-SME) secured by residential property in Luxembourg.  In its opinion (CRS/2016/004), the CdRS expresses its view that risk weights that are based on internal models ("IRB Approach") for loans secured by residential real estate should not produce an average risk weight for residential property in Luxembourg below 15%. Also the CdRS recommendation (CRS/2016/004) invites the CSSF to take any appropriate measure to ensure that credit institutions respond to the CdRS’ opinion. The CSSF is following up on banks’ compliance in the context of macroprudential supervision.



Circulaire CSSF 16/643

30.08.2016 : Avis et recommandation du Comité du Risque Systémique concernant la pondération des risques appliquée à l’ensemble des expositions sur la clientèle de détail (non PME) garanties par des biens immobiliers résidentiels au Luxembourg