The EACB welcomes the opportunity to comment on the EBA Draft Guidelines on ADC exposures to residential property under Article 126a of CRR.
ADC exposures are a sizeable component of real estate markets across the EU and we appreciate the EBA’s efforts to set out a comprehensive approach. We also appreciate the idea to inform the finalization of the draft Guidelines with a QIS assessing the impact of the proposed requirements both in quantitative and qualitative manner.
Despite the general assumption that ADC exposures carry higher risks, we believe it is key to ensure that the historically modest risk profile of these exposures in EU, in light of the specific contractual practices established over time, and risk mitigating factors embedded in national experiences and legislation, is taken into due account.
We see that there are several elements to be better clarified, this is particularly true when looking at the case of non-profit projects, whose specificities should be better reflected in the final policy choices.