#banksonbasel: Marc Heß

Marc Heß Chief Financial Officer of Aareal Bank and Member of the Board of Managing Directors of vdp

Hard Test: why is it necessary for regulatory authorities to publish uniform data?

Rising interest rates and increasing capital requirements have driven up the cost of property loans. Hence, any relief options available should be used consistently when implementing Basel III in regulatory practice. The so-called “Hard Test” provides an indication of how healthy a given property market is: passing that test allows financings to be extended at more favourable terms. However, not all supervisory authorities prepare the associated data in a manner that allows Pfandbrief issuers to include such data when calculating their capital adequacy requirements. Therefore, it should be ensured that data related to the Hard Test will be published uniformly and at a national level.