EU engages with “Basel” revisions

27th September 2016

The Rail Working Group has taken up with the European Commission the rail industry’s concerns about the proposed revisions from the Basel Committee on Banking Supervision to bank capital allocations for asset based lending. Specifically the RWG argues that the stable nature of rolling stock as an asset class and the additional protection of the Luxembourg Rail Protocol once in force, have to be taken into account by banks in assessing risk and capital allocation. In his response to RWG Chairman Howard Rosen, EU Commission Vice President Dombrovskis stated that “as you know, the Commission is fully committed to promoting sustainable long-term funding sources for investments in sectors critical to Europe’s future including the area of cross-border and sustainable transport”.

The Commission has been reviewing evidence submitted as part of a public consultation on the impact of new regulatory regimes on long-term finance. Vice President Dombrovskis concludes by stating that “the data and examples included in your letter will provide valuable input to the Commissions on-going assessment of the potential adjustments to the capital treatment of specialised lending exposures”.

See the full exchange of correspondence here.