Apr 10 2024 13 mins 1
Basel 3.1 reforms will lead banks to apply high haircuts to unsustainably high property values and adjust mortgage risk weights to better differentiate between low-risk and high-risk loans.
Speakers: Alexander Zeidler, VP-Sr Credit Officer at Moody's Ratings; Guillaume Lucien-Baugas, VP-Senior Analyst at Moody's Ratings
Hosts: Aaron Johnson, VP-Senior Research Writer at Moody's Ratings; Danielle Reed, VP-Senior Research Writer at Moody's Ratings
Related Research:
- Basel 3.1 will reduce risk of boom and bust property cycles, boost private credit market
- Rising interest rates will weaken commercial property values and raise refinancing risk
- Explanatory comment – Haircuts smooth CRE values through the property market cycle
