The European Banking Authority (EBA) has published an opinion on mortgage lending value (MLV) which is addressed to the European Commission.

Under article 124(4)(a) of the Capital Requirements Regulation (CRR) the EBA has a mandate to develop draft regulatory technical standards (RTS) to specify the criteria for the assessment of MLV.

In its opinion the EBA raises concerns about the possible unintended consequences that a harmonised definition of MLV across the CRR might have on the EU covered bonds market.

The EBA advises the Commission that the scope of application of the RTS on MLV should be limited to the credit risk area, the credit risk mitigation and the large exposure framework. The EBA advises the Commission to initiate appropriate legislative steps with a view to limiting the scope of these RTS on MLV.

View EBA seeks legislative clarifications on mortgage lending value, 5 October 2015