The European Banking Authority has issued an opinion to the European Commission on the Austrian Financial Market Authority’s plan to raise an existing sectoral systemic risk buffer for commercial real estate exposures in Austria, and it does not object. The measure increases the buffer from 1% to 3.5% for Austrian credit exposures to non-financial corporates active in construction of buildings, specialised construction activities, and real estate services, while exempting exposures to limited-profit housing associations. It must be applied on a consolidated, sub-consolidated, and individual basis, with a phase-in to 2% from 1 July 2026 and to 3.5% from 1 July 2027. The EBA said the Austrian authorities had evidenced material macroprudential risk in the segment, with commercial real estate lending accounting for 34% of total lending to non-financial corporates and the non-performing loan ratio in the segment rising to 8.3% at end-2025 from 1% at end-2022. For three institutions, the higher sectoral buffer would push the sum of the other systemically important institution buffer and the combined systemic risk buffer on the targeted exposures to between 5.75% and 6.25%. The opinion also calls for continued coordination and information sharing among relevant authorities, noting possible internal market frictions including impediments to intra-group capital flows, and stresses the need to monitor overlap with stress-test-based requirements, Pillar 1 and Pillar 2 capital requirements, Pillar 2 Guidance, and the CRR output floor as it phases in.
European Banking Authority 2026-05-12
European Banking Authority does not object to Austria raising the commercial real estate systemic risk buffer to 3.5%
The European Banking Authority issued an opinion to the European Commission on the Austrian Financial Market Authority’s plan to raise the sectoral systemic risk buffer for commercial real estate exposures in Austria from 1% to 3.5%, and raised no objection. The measure applies on a consolidated, sub-consolidated and individual basis, excludes exposures to limited-profit housing associations, and is phased in via a 2% rate from July 2026 before reaching 3.5% from July 2027. The EBA cited elevated macroprudential risks in commercial real estate, potential internal market frictions and overlap with other capital requirements, and called for continued coordination and information sharing among authorities.