Banca d'Italia reciprocates Austria's systemic risk buffer

The European Systemic Risk Board (ESRB) issued Recommendation ESRB/2025/10, inviting relevant European Economic Area authorities to reciprocate a sectoral systemic risk buffer (sSyRB) adopted by Austria.

This buffer mandates a 1 percent capital requirement on risk-weighted exposures to non-financial corporations operating in the construction and real estate sectors and located in Austria, with the exception of limited-profit housing associations.

The original Austrian measure, which became effective as of July 1, 2025, has been applied by Austria on a consolidated, sub-consolidated, and individual basis.

The ESRB's recommendation aims to ensure consistent macroprudential policy application across borders and prevent regulatory arbitrage within the single market, thereby strengthening financial stability in vulnerable sectors.

Following the ESRB's recommendation, the Banca d'Italia has decided to reciprocate the Austrian measure for exposures held by Italian banks and banking groups.

A key aspect of the reciprocation is the de minimis principle, which exempts credit institutions whose relevant exposures are below a materiality threshold of €100 million at the consolidated level.

For credit institutions not belonging to groups, this threshold applies on an individual basis.

Affected Italian credit institutions will be required to hold the sectoral systemic risk buffer on a consolidated, sub-consolidated, and individual basis as of April 1, 2026.