Germany's Federal Financial Supervisory Authority consults on reciprocally applying Austria’s 1 percent sectoral systemic risk buffer for construction and real estate exposures

Germany’s Federal Financial Supervisory Authority (BaFin) has opened a hearing on a planned general administrative order to reciprocally apply the Austrian Financial Market Authority’s sectoral systemic risk buffer of 1.0% to German institutions’ specified risk exposures in Austria. The requirement would be met with Common Equity Tier 1 capital and would apply where Austria-located exposures exceed EUR 100 million on a solo, sub-consolidated or consolidated basis. Scope is limited to exposures to non-financial corporates in Austria’s construction and real estate sectors, excluding non-profit housing associations, based on NACE classifications F 41 (construction of buildings), F 43 (specialised construction activities) and M 68 (real estate activities). A EUR 100 million materiality threshold would be assessed by aggregating exposures held via branches, direct cross-border lending and subsidiaries, and applied on each of the solo, sub-consolidated and consolidated bases. The planned order would cover institutions and groups within the German Banking Act capital buffer perimeter (with specified statutory exemptions) and is aligned with the European Systemic Risk Board’s recommendation on voluntary cross-border reciprocity. Comments are invited until 4 February 2026, after which BaFin will decide whether to issue the order. If adopted, it would be publicly announced, treated as notified the following day and enter into force one month after that announcement.