#banksonbasel: Alexander Müller

Alexander Müller Member of the Boards of Managing Directors of apoBank and of vdp

Why did Basel III lose sight of its original goal?

Basel, Brussels and the national governments had good reasons for saying that the capital requirements should on no account be significantly increased by the reform. There was a consensus of expectations that increases would be no more than 10%. The Pfandbrief banks fail to understand why, as things stand today, the outcome is to be so glaringly wide of the mark, contrary to the assurances made in recent years, in particular with regard to lending that is verifiably low-risk. At apoBank, too, we see signs of a largely standardised and, therefore, less risk-oriented calculation of capital requirements if use of the internal regulatory risk-measurement models is restricted. We are currently expecting the additional capital requirement to be clearly more than 10% in low-risk real estate lending, despite the fact the German residential and commercial property markets are highly developed and show very low default rates.