The European Banking Authority (EBA) published today a report on macroprudential policy measures across the EU. The objective of this report is to take stock of the range of practices applied by EU Member States in relation to the provisions for macroprudential policies set out in the Capital Requirements Regulation and Directive (CRR/CRD IV), focusing on the interaction of macroprudential and microprudential objectives and tools. The report will contribute to the ongoing discussions regarding the implementation of macroprudential measures and will provide additional input for the regulatory work carried out by the European Commission, the EBA and the European Systemic Risk Board (ESRB) regarding macroprudential tools.
This report gathers and analyses the notifications received by the EBA regarding the application by EU Member States of a number of macroprudential tools in the first five quarters following the implementation of the CRR/CRD IV. In this period, Member States made significant use of the new framework, mostly in relation to the application of macroprudential measures in the real estate sector and/or to address systemic risks and capital requirements for systemically important institutions. In particular, the most frequently used measures included higher risk weights for exposures secured by mortgages and the systemic risk buffer. Pillar 2 measures were also applied for macroprudential purposes in several cases.
The report makes a number of observations related to the analysed measures. First, it highlights the need for clarification and enhanced transparency in this framework, with special reference to the objectives of each different tool and its corresponding processes. Second, it acknowledges that there are significant interactions with stress test as well as the usage and interpretation of solvency ratios that need to be taken into account. The report concludes that the implementation of macroprudential measures requires a strong coordination between macroprudential and microprudential authorities.