DNB lets mortgage risk weight measure expire
De Nederlandsche Bank (DNB) has decided not to extend the minimum floor on the risk weights of Dutch mortgage loans for banks. The measure, introduced in January 2022, will expire on November 30, 2026.
Systemic risks decline, bank resilience up
DNB's assessment indicates that while systemic risks in the Dutch housing market persist, they have gradually decreased over recent years.
Furthermore, Dutch banks have shown increased resilience against potential housing price corrections.
DNB now expects banks to maintain sufficient stability against the materialization of housing market risks, even without the specific risk weight measure.
This conclusion follows an evaluation of the measure, which was initially implemented to address elevated systemic risks.
Focus shifts to other macroprudential tools
The expiration of the Article 458 measure underscores the ongoing importance of other macroprudential instruments, particularly the current countercyclical capital buffer (CCyB) set at 2 percent, in safeguarding the resilience of the Dutch banking sector.
DNB will continue its close monitoring of systemic risks within the housing market and banks' mortgage risk weighting practices, prepared to implement additional measures if deemed necessary.
The measure, based on DNB's competence under Article 458 of the Capital Requirements Regulation (CRR3), was extended twice before its current expiration.