Norway's Ministry of Finance has revised the notification approach for its mortgage risk-weight floor for internal ratings-based (IRB) banks, renotifying the measure using the more comprehensive process under Article 458(2) to (4) of the Capital Requirements Regulation (CRR) to support consistent handling by relevant EU and EEA bodies. The ministry has applied temporary floors since 2019 for the average risk weighting of mortgage and commercial real estate loans for IRB banks. In December 2024 it decided to increase the mortgage floor from 20 percent to 25 percent, effective 1 July 2025, while maintaining the commercial real estate floor at 35 percent. It initially notified the European Systemic Risk Board (ESRB) and the EFTA Surveillance Authority (ESA) under the simplified procedure in CRR Article 458(10), which applies where the measure does not increase banks' risk weights by more than 25 percent, but noted that CRR does not specify how that increase should be calculated and that the mortgage-floor impact can be measured in different ways. Under the renotification, the EFTA States' Standing Committee will assess the measure based on an ESA recommendation that must take account of statements from the ESRB and the European Banking Authority (EBA).
Department of Finance (Norway) 2025-04-10
Norway's Ministry of Finance renotifies 25 percent mortgage risk-weight floor under the full CRR Article 458 procedure
Norway's Ministry of Finance has revised its notification approach for the mortgage risk-weight floor for internal ratings-based banks, using the process under Article 458(2) to (4) of the Capital Requirements Regulation. The mortgage floor will increase from 20% to 25% effective 1 July 2025, while the commercial real estate floor remains at 35%. The EFTA States' Standing Committee will assess the measure based on recommendations from the EFTA Surveillance Authority, considering input from the European Systemic Risk Board and the European Banking Authority.