NAREIT joined The Real Estate Roundtable, the Mortgage Bankers Association and the CRE Finance Council (CREFC) last week in submitting comments to the Basel Committee on Banking Supervision (BIS) in response to its recent consultation document proposing revisions to the standardised approach for credit risk.
The consultation document covers a new framework for assigning risk weights to bank credit exposures, including those related to commercial real estate. The coalition of industry organizations urged that regulators adopt criteria for evaluating commercial real estate exposures that conform as closely as possible to actual underwriting analysis, rejecting an approach that would treat all commercial real estate lending as unsecured. The group also recommended that the BIS adopt the current U.S. (Basel III) criteria for evaluating acquisition, development and construction lending and SPE loans.
CLICK HERE to read the letter to the BIS.