#banksonbasel: Gero Bergmann
Why does commercial property financing, too, deserve to be treated differently under Basel III?
The European Commission has recognised the justification for giving special treatment to low-risk residential property loans. According to the legislative proposal, transitional periods with lower risk weights are envisaged until 2032. It would be equally appropriate to grant special treatment to commercial property loans whose loan-to-value ratios are as low as for residential property loans, and which meet similarly strict additional conditions in the form of bank-specific hard test requirements, for example. There is no reason to treat comparable risks in materially different ways.