Basel Committee project on risk calibration for banks exposure to infrastructure projects : the Intergroup writes to VP Dombrovkis

On July 22, 11 MEPs from the long-term investment Intergroup wrote to Vice-President Dombrovskis and called for the Commission’s opposition to recent draft proposals from the Basel Committee on the revision of the standardized approach for credit risk. A major concern is related to the calibration for specialized lending, including for infrastructure financing which could reach 150% in some instances. A figure to be put into perspective as the Basel Committee considers that unrated corporate exposures should be risk weighted at 100 %, even while their loss rate is generally higher than for infrastructure project finance loans.

A solution to protect the financing of infrastructure projects by banks without compromising financial stability could reside in a model in which “the eligible infrastructure assets could be restricted to projects within the EU and, outside the EU, to sectors with high recovery rates, low volatility and complying with the investment guidelines of long-term investors.

The Long-term Investment and reindustrialisation Intergroup will keep mobilizing to defend the imperative financing of infrastructures in the EU.

See the letter