act legal Germany 25. януари 2023

New version of MaRisk – Circular 10/2021 (BA) – Minimum risk management requirements

What exactly is the issue?

BaFin is currently consulting on an amendment to MaRisk, which will probably be implemented in Q1/Q2 2023.

Subject of the implementation

The 7th MaRisk amendment adopts in particular the requirements of the EBA guidelines on loan origination and monitoring (EBA/GL/2020/06) and thus a large number of additions to the design of credit processes as well as the consideration of ESG factors.

Furthermore, provisions on the handling of real estate business, in particular set-up organization, processes in real estate business, especially in acquisition/establishment, processing and monitoring of real estate projects are introduced.

Changes affecting all institutions

One of the most significant changes in the 7th MaRisk amendment relates to the consideration of ESG risks in the definition of risk-bearing capacity and its analysis, the design of the business strategy, risk management and controlling processes, and the ICS of an institution, including risk reporting.

Institutions must align their business strategy in an economically sustainable manner and develop it on the basis of a forward-looking analysis. To this end take into account changing environmental conditions and the transition to a sustainable economy. To this end, a business model analysis, including stress tests, must be carried out.

In the future, the institute’s capital planning must take into account operational business planning.
The use of models for decision-making (e.g. risk classification and quantification procedures, stress tests, valuation models, etc.) is subject to new requirements in terms of data sources, adjustments and reliability. The Ma-Risk amendment does not affect models that require approval by the competent authorities and fall within the scope of Regulation (EU) No. 575/2013 (CRR).

Innovations in lending

When granting loans and valuing loan collateral, ESG risks must be taken into account and the EBA Guidelines on Lending and Monitoring (EBA/GL/2020/06) must be followed. Loans and loan collateral shall be analyzed at least annually for enforceability and default risks.

Leveraged Transactions

Institutions with a portfolio of leveraged transactions shall also comply with the requirements of the EBA Guidelines on Lending and Supervision (EBA/GL/2020/06), Section 4.3.2 (Leveraged Transactions) when defining their strategy.

Changes in the lending business

If an institution is active in the real estate business (investment volume of more than EUR 10 million per year and/or 2% of total assets), MaRisk defines in the new Special Part BTO 3 requirements for the organizational structure, processes in the real estate business, in particular for acquisition/construction and the further processing and monitoring of real estate projects as well as the monitoring of real estate projects.

Effects on practice

All changes must be reflected accordingly in the organizational guidelines. This means that you not only have to implement the changes, but also document that you will implement them in the future.
We will be happy to support you in adapting your organizational guidelines and manuals in a way that fits the scope of your business model and reflects your corporate culture.

For more information please contact

Marcus Columbu

Attorney at law
act legal Germany Frankfurt, Germany
Phone: +49 69 24 70 97 32