We appreciate the improvements introduced especially with regard to the reintroduction of external ratings, treatment of bank exposures and SMEs. However, we still see the need for further work with regard to real estate, retail exposures, short term interbank positions. Moreover, we have serious concerns on the proposed treatment of equity holdings in companies in the non-financial sector. While in jurisdictions such as the EU these exposures are risk weighted at 100%, the Committee 250% risk weight (albeit reduced from the previous proposal of 300%) might strongly impair real economy financing. Equity holdings are, for many cooperative banks, also as an expression of a pivotal role in local economic development.
The Quantitative Impact Study (QIS) published in February provides an essential opportunity to assess the potential impact of this regulatory initiative. It is therefore of the utmost importance that the new QIS results are shared with the industry. However, since the consultation and the QIS deadlines are not aligned, it is not possible for us to comment at all on the QIS results in this response. Therefore, we would ask the Committee to engage the industry even after the closing of the consultation period, when the latest QIS results are available, and to revisit certain key points made by respondents in light of the information derived from the impact assessment.
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