1. Home
  2. Studien
  3. The Impact of Basel IV on Real Estate Financing
Markus Demary / Michael Voigtländer IW-Policy Paper Nr. 18 14. September 2020 The Impact of Basel IV on Real Estate Financing

The new bank regulations generally summarised as Basel IV include the introduction of an output floor. This means that banks are allowed less deviation from standard approaches when using internal models.

PDF herunterladen
The Impact of Basel IV on Real Estate Financing
Markus Demary / Michael Voigtländer IW-Policy Paper Nr. 18 14. September 2020

The Impact of Basel IV on Real Estate Financing

IW-Policy Paper

Institut der deutschen Wirtschaft (IW) Institut der deutschen Wirtschaft (IW)

The new bank regulations generally summarised as Basel IV include the introduction of an output floor. This means that banks are allowed less deviation from standard approaches when using internal models.

This change will have far-reaching consequences. According to estimates by the European Banking Authority (EBA), German banks alone will have to increase their minimum capital requirements by around 20 percent; overall, Basel IV will increase capital requirements by 38 percent in Germany and by an average of 26 percent across the EU.

Banks are therefore facing major challenges. Due to the difficult economic situation, they cannot realise capital increases simply by withholding profits or through obtaining increased capital from investors. It is therefore likely that they will become more involved in government financing, since this does not require equity investment, and similarly likely that they will use their remaining equity primarily where they can achieve the highest margins, i.e. with relatively risky financing. In addition, securitisation and cooperation with credit funds are also becoming more likely, which means less transparency, along with more risk being shifted to the shadow banking sector. For borrowers, the reforms could go hand in hand with higher interest rates.

These high costs are not offset by social advantages, since lending in the countries particularly affected by the reforms is relatively prudential. Overall, it is therefore advisable not only to postpone the reforms in their current conception, but to fundamentally reconsider them.

Inhaltselement mit der ID 7744
PDF herunterladen
The Impact of Basel IV on Real Estate Financing
Markus Demary / Michael Voigtländer IW-Policy Paper Nr. 18 14. September 2020

Markus Demary / Michael Voigtländer: The Impact of Basel IV on Real Estate Financing

IW-Policy Paper

Institut der deutschen Wirtschaft (IW) Institut der deutschen Wirtschaft (IW)

Mehr zum Thema

Artikel lesen
Welche Risiken müssen Banken 2024 managen?
Hubertus Bardt im KPMG-Podcast Audio 9. Januar 2024

Welche Risiken müssen Banken 2024 managen?

Klimaveränderungen und Naturkatastrophen, die vielfältigen Folgen der Corona-Pandemie für die Wirtschaft, Cyberrisiken und geopolitische Spannungen. Laut OECD ist die öffentliche Verschuldung besorgniserregend, das Wachstum weiter mittelmäßig. Darüber spricht ...

IW

Artikel lesen
Markus Demary / Ralph Henger / Michael Voigtländer Veranstaltung 18. Dezember 2023

Auftaktveranstaltung Fin.Connect.NRW

Die Finanzplatzinitiative und das gleichnamige Netzwerk Fin.Connect.NRW starten in die nächste Phase und lädt zur Auftaktveranstaltung ein.

IW

Mehr zum Thema

Inhaltselement mit der ID 8880