Article 495c Transitional arrangements for leasing exposures as a credit risk mitigation technique

By way of derogation from Article 230, the applicable value of Hc corresponding to ‘other physical collateral’ for exposures referred to in Article 199(7) where the asset leased corresponds to the ‘other physical collateral’ type of funded credit protection, shall be the value of Hc for ‘other physical collateral’ provided for in Article 230(2), Table 1, multiplied by the following factors:

50 % during the period from 1 January 2025 to 31 December 2027;

80 % during the period from 1 January 2028 to 31 December 2028;

100 % during the period from 1 January 2029 to 31 December 2029.

EBA shall prepare a report on the appropriate calibrations of risk parameters associated with leasing exposures under the IRB Approach, and of risk weights under the Standardised Approach, and in particular on the LGDs and Hc provided for in Article 230. EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for exposures associated with different types of properties leased and different types of institutions practicing leasing activities.

EBA shall submit that report to the European Parliament, to the Council and to the Commission by 10 July 2027.

On the basis of that report, and taking into account the internationally agreed standards developed by the BCBS, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2028.