The European Banking Federation, together with representatives of the European mortgage, real estate and banking sectors, has sent and published a joint letter to the European Commission on the impact of European financial regulation on real estate lending. The letter links the issue to housing affordability challenges across the European Union and warns that evolving prudential requirements, including the implementation of CRR3 and the output floor, may materially increase capital requirements for low-risk residential real estate exposures and constrain banks’ lending capacity. The signatories call on the Commission to preserve and make permanent the transitional provisions under Article 465(5) of the Capital Requirements Regulation, extend them to banks using the Standardised Approach in line with the low-risk criteria, and assess the broader impact of prudential rules.
European Banking Federation 2026-02-26
European Banking Federation publishes joint letter urging European Commission to preserve and extend CRR transitional provisions for low-risk residential real estate lending
The European Banking Federation and sector representatives urge the European Commission to address financial regulation's impact on real estate lending, linking it to EU housing affordability issues. They warn that evolving prudential requirements, including CRR3 and the output floor, could increase capital requirements for low-risk residential real estate and limit banks' lending capacity. The letter calls for preserving and extending transitional provisions under Article 465(5) of the Capital Requirements Regulation.