Mutual recognition of macroprudential measures (reciprocity)

Foreign institutions operate alongside domestic ones on the financial markets of individual EU countries. They do so primarily in the form of branches or through direct cross-border provision of services. However, the macroprudential measures adopted by a Member State may not be binding on those foreign institutions. This can undermine the effectiveness of such measures and give rise to an unlevel playing field. Consequently, the concept of reciprocity has been incorporated into the rules governing macroprudential policy in the EU in order to make that policy as effective and consistent as possible. For some measures with obvious cross-border impacts, CRD IV sets forth mandatory reciprocity, i.e. automatic application of the relevant measures in other Member States. These measures relate to banks’ exposures and include, for example, the countercyclical capital buffer. Measures for which reciprocity is not stipulated in CRD IV can be implemented by other Member States in justified cases on a voluntary basis.

The framework for voluntary reciprocity is based on the principle whereby the national macroprudential authority activating the measure makes a request through the European Systemic Risk Board (ESRB) for the measure to be applied by the other EU Member States. If the ESRB concludes that the request is justified, it issues a recommendation to reciprocate. The Member States either comply with the ESRB’s recommendation or explain why they are rejecting it.

The macroprudential measures implemented in EU countries in respect of which the Czech Republic has been recommended to reciprocate will be published below together with the CNB’s opinion. A list of all measures introduced by macroprudential authorities in the EU, along with their reciprocity status in the Member States, is provided on the ESRB website.

Active macroprudential measures adopted in EU countries with a request for reciprocation in the Czech Republic

Country Instrument Date of notification to the ESRB The CNB’s action Justification
Belgium Activation of Article 133 of the CRD 30 March 2022 Not reciprocated Link to the CNB’s statement
France Activation of Article 458 of the CRR 3 April 2018 Not reciprocated Link to the CNB’s statement
Lithuania Activation of Article 133 of the CRD 16 February 2022 Not reciprocated Link to the CNB’s statement
Luxembourg LTV limit 9 November 2020 Not reciprocated Link to the CNB’s statement
Germany Activation of Article 133 of the CRD 10 March 2022 Not reciprocated Link to the CNB’s statement
Netherlands Activation of Article 458 of the CRR 16 February 2022 Not reciprocated Link to the CNB’s statement
Norway Systemic risk buffer and activation of Article 458 of the CRR 16 December 2022 Not reciprocated Link to the CNB’s statement
Sweden Activation of Article 458 of the CRR 12 May 2023 Not reciprocated Link to the CNB’s statement
Sweden Activation of Article 458 of the CRR 27 June 2018 Not reciprocated Link to the CNB’s statement

Non-active macroprudential measures adopted in EU countries with a request for reciprocation in the Czech Republic

Country Instrument Date of notification to the ESRB The CNB’s action Justification Valid until
Norway Systemic risk buffer and activation of Article 458 of the CRR 5 November 2020 Not reciprocated Link to the CNB’s statement 30 December 2022
Belgium Activation of Article 458 of the CRR 14 March 2018 Not reciprocated Link to the CNB’s statement 30 April 2022
Belgium Activation of Article 458 of the CRR 21 January 2016 Not reciprocated Link to the CNB’s statement 16 July 2018
Estonia Systemic risk buffer  26 April 2016 Not reciprocated Link to the CNB’s statement 2 June 2020
Finland Activation of Article 458 of the CRR 27 June 2017 Not reciprocated Link to the CNB’s statement 31 December 2020