(1)

In order to ensure the effectiveness and consistent application of national macroprudential policy measures, it is important to rely on voluntary reciprocity for measures that are not subject to mandatory recognition under Union law. In the absence of recognition, a macroprudential measure taken in one Member State applies only to credit institutions authorised by that Member State. This can create possibilities for credit institutions to circumvent the measure through direct cross-border lending or lending through branches. Recognition of national macroprudential policy measures can prevent leakages and regulatory arbitrage, as well as distorting effects on competition that would result from the application of different macroprudential requirements in relation to the same exposures depending on where a credit institution is established.

(2)

The framework on voluntary reciprocity for macroprudential policy measures set out in Recommendation ESRB/2015/2 of the European Systemic Risk Board (5) aims to ensure that all exposure-based macroprudential policy measures activated in one Member State are reciprocated in other Member States.

(3)

On 12 March 2024, Banca d’Italia, acting as the designated authority for the purpose of Article 133 of Directive 2013/36/EU, notified the European Systemic Risk Board (ESRB) of its intention to set a sectoral systemic risk buffer rate in accordance with Article 133(9) of that Directive, to strengthen the resilience of the Italian banking sector to shocks unrelated to the credit cycle, and hence its capacity to absorb losses and to support the provision of credit to the economy. The systemic risk buffer (SyRB) rate will apply to credit institutions authorised in Italy. A SyRB rate of 0,5 % will apply from 31 December 2024 to all credit risk exposures and counterparty credit risk exposures in Italy. The rate will increase to 1 % from 30 June 2025. The SyRB rate will be reviewed at least every two years.

(4)

On 12 March 2024, Banca d’Italia, acting as the designated authority for the purpose of Article 133 of Directive 2013/36/EU, submitted a request to the ESRB to recommend the reciprocation of the aforementioned macroprudential policy measure, on an individual and on a consolidated basis, pursuant to Article 134(5) of Directive 2013/36/EU.

(5)

The reciprocation of macroprudential capital requirements activated by authorities of other Member States, on an individual and on a consolidated basis, irrespective of whether the exposures concerned are held through subsidiaries or branches, or result from direct cross-border lending, limits leakages and regulatory arbitrage, tackles systemic risks and thus promotes the overall effectiveness of macroprudential policy by ensuring that increased risks are addressed not only in the Member State that has introduced the SyRB but also in other Member States where banking groups are exposed to those increased risks. Recognition should therefore also aim to ensure that banking groups exposed to those systemic risks are sufficiently resilient. Therefore, macroprudential capital requirements stemming from a decision to recognise other Member States’ macroprudential measures should in general be applied on both an individual and a consolidated basis.

(6)

To recognise the Italian SyRB rate as requested by Banca d’Italia, the relevant competent and/or designated authorities of another Member State may set a SyRB rate in accordance with Articles 134 and 133 of Directive 2013/36/EU.

(7)

In accordance with Article 134(1) of Directive 2013/36/EU, the recognition of the notified Italian SyRB rate by other Member States would apply to exposures located in Italy of institutions authorised in the reciprocating Member States.

(8)

In accordance with Article 133(4) of Directive 2013/36/EU, a SyRB rate may be applied on an individual, sub-consolidated, or consolidated basis. Therefore, recognition of a SyRB rate set by another Member State entails the possibility to apply a SyRB rate to all exposures on a consolidated basis (including exposures held through subsidiaries located in another Member State).

(9)

Deviation from the general approach of applying the recognised Italian macroprudential policy measure on both an individual and consolidated basis may be justified in certain cases, for instance where the reciprocating authorities deem that those systemic risks are already adequately and appropriately mitigated by existing macroprudential or microprudential requirements applied in the Member State where the banking group is consolidated.

(10)

Recommendation ESRB/2015/2 of the ESRB, as amended by Recommendation ESRB/2017/4 (6), recommends that the relevant authority activating a macroprudential policy measure should, when submitting a request for reciprocation to the ESRB, propose a materiality threshold below which an individual financial service provider’s exposure to the identified macroprudential risk in the jurisdiction where the macroprudential policy measure is applied by the activating authority can be considered non-material. The ESRB may recommend a different threshold if deemed necessary.

(11)

Following the Italian request for the reciprocation of the measure by other Member States and in order to prevent the materialisation of negative cross-border effects in the form of leakages and regulatory arbitrage that could result from the implementation of the macroprudential policy measure that will become applicable in Italy, the General Board of the ESRB decided to include this measure in the list of macroprudential policy measures that it recommends to be reciprocated under Recommendation ESRB/2015/2. The General Board of the ESRB also decided to recommend an institution-specific materiality threshold of EUR 25 billion. The relevant authorities reciprocating the measure may exempt institutions from the systemic risk buffer requirement as long as their relevant exposures do not exceed EUR 25 billion. As the measure to be issued in recognition of the notified Italian SyRB rate, should also apply on a consolidated basis, the sum of exposures held through branches, direct cross-border lending and through subsidiaries should be assessed against the materiality threshold.

(12)

Therefore, Recommendation ESRB/2015/2 should be amended accordingly,