The Norwegian Financial Supervisory Authority (Finanstilsynet) has decided to recognise a Swedish macroprudential measure targeting lending secured on commercial real estate and commercial residential property in Sweden, and to apply it to Norwegian banks using the internal ratings-based (IRB) approach with material exposures in Sweden. The Swedish measure requires IRB banks to apply an average risk-weight floor of 35% for corporate exposures secured by commercial real estate and 25% for corporate exposures secured by commercial residential property. Finanstilsynet’s decision makes these floors applicable to Norwegian IRB banks at both solo and consolidated level where relevant Swedish exposures exceed the materiality threshold of SEK 5 billion, with effect from 31 January 2024. The move follows a reassessment after Norwegian banks’ exposures in Sweden rose above the threshold, having previously been below it when Sweden’s Financial Supervisory Authority introduced the measure in autumn 2023 and requested reciprocity in line with a 2023 European Systemic Risk Board recommendation.
Norwegian Finanstilsynet 2025-01-30
Norwegian Financial Supervisory Authority recognises Sweden’s 35% and 25% IRB risk-weight floors for Swedish property exposures
The Norwegian Financial Supervisory Authority (Finanstilsynet) will apply a Swedish macroprudential measure to Norwegian banks using the internal ratings-based approach with significant exposures in Sweden. This mandates a risk-weight floor of 35% for corporate exposures secured by commercial real estate and 25% for those secured by commercial residential property, applicable at both solo and consolidated levels for exposures exceeding SEK 5 billion. The decision follows a reassessment after Norwegian banks' exposures in Sweden surpassed the materiality threshold.