Financial Institutions - Commercial

MBA actively focused its participation with financial institutions on the New Basel Capital Accord (also known as Basel II). Basel II will establish voluntary risk-based capital standards on a global level. The Accord would set banking reserve standards for commercial and residential real estate transactions. International guidelines for the Accord were released by the Bank for International Settlements (BIS) in June 2004. U.S. banking regulators are expected to adopt final regulations consistent with the Basel II guidelines by early 2008.

The major objectives of Basel II include creating a better link between minimum regulatory capital and risk, enhancing market discipline, supporting a level playing field in an increasingly integrated global financial system, establishing and maintaining a minimum capital cushion sufficient to foster financial stability in periods of adversity and uncertainty, and grounding risk measurement and management in actual data and formal quantitative techniques. Critical to Basel II is the effort to improve risk measurement and management, especially at the largest, most complex organizations.

MBA Updates

  • MBA sent a comment letter on April 12, 2006 to Office of the Comptroller of the Currency, regarding Concentration in Commercial Real Estate Lending, Sound Risk Management Practices. Click here to view letter.
  • Basel II. MBA and the members continue to work with federal regulators to provide the perspective of the real estate finance industry on U.S. regulatory standards for Basel II implementation.

  • MBA continues to schedule forums between members and Federal Reserve staff to ensure member interests are represented as U.S. regulatory standards are developed.

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Information coming soon