AI Summary of Article 199 Additional eligibility for collateral under the IRB Approach
The regulation outlines permissible forms of collateral for institutions calculating risk-weighted exposure and expected loss under the IRB Approach, encompassing immovable property, receivables, physical collateral, and leasing. Residential and commercial properties may be included if certain risk criteria regarding borrower performance and property value dependency are met.
Additionally, institutions can consider derogations based on published loss rate evidence from competent authorities in Member States or third countries with equivalent supervisory frameworks, enhancing their collateral management strategies.
Article 199 Additional eligibility for collateral under the IRB Approach
1. In addition to the collateral referred to in Articles 197 and 198, institutions that calculate risk-weighted exposure amounts and expected loss amounts under the IRB Approach may also use the following forms of collateral:
(a) immovable property collateral in accordance with paragraphs 2, 3 and 4;
(b) receivables in accordance with paragraph 5;
(c) other physical collateral in accordance with paragraphs 6 and 8;
(d) leasing in accordance with paragraph 7.
2. Unless otherwise specified under Article 124(9), institutions may use as eligible collateral residential property which is or will be occupied or let by the owner, or the beneficial owner in the case of personal investment companies, and commercial immovable property, including offices and other commercial premises, where both of the following conditions are met: