EBA Publishes Final Rules on Guarantees for Unfinished Property Exposures

The European Banking Authority (EBA) has released its final Regulatory Technical Standards (RTS) that define what counts as an “equivalent legal mechanism” for unfinished properties under the Capital Requirements Regulation (CRR).

These rules are part of the first phase of the EBA’s work to implement the EU Banking Package.

What’s it about?
The RTS set out the conditions under which property under construction can be considered when banks calculate capital requirements using the Standardised Approach for credit risk.

Key points:

• The RTS define strict criteria for guarantees or legal mechanisms to be accepted;
• They allow for national completion guarantee schemes already used in some EU countries, as long as they meet common safeguards—like having a minimum credit rating and being legally enforceable;
• The final version reflects stakeholder feedback and aims to be both prudent and practical for use across the EU.

Learn more: eba.europa.eu.