Moody's Talks - Securitization Spotlight

Basel Endgame will smooth real estate cycles, create opportunities for non-bank lenders

Episode Summary

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.

Episode Notes

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