The impact of the New Basel Capital Accord on real estate developers
Language: English Series: Journal of Property Investment and Finance ; 24(1) 2006, 7-49(43)Publication details: 2006Subject(s): Summary: Examines the impact of the New Basel Capital Accord (Basel 2) on the future pricing and availability of debt capital and on the cost of capital in real estate financing and to present possible reactions for real estate developers. Concludes that the availability and pricing of debt capital will be risk-adjusted and will depend on the amount of regulatory equity banks will have to hold in reserve for a credit engagement. The cost of debt capital in real estate financing will rise due to systemic reasons deriving from Basel 2. Banks are and will remain very restrictive with regard to credit allowances, and use of the positive leverage effect will become more difficult. Structured financing, in particular the use of private equity, is the best way to fill a potential financing gap.| Item type | Current library | Call number | Copy number | Status | Barcode | |
|---|---|---|---|---|---|---|
| Journal article | London Journal article | L133067 (Browse shelf(Opens below)) | 1 | Available | 133067-1001 |
Examines the impact of the New Basel Capital Accord (Basel 2) on the future pricing and availability of debt capital and on the cost of capital in real estate financing and to present possible reactions for real estate developers. Concludes that the availability and pricing of debt capital will be risk-adjusted and will depend on the amount of regulatory equity banks will have to hold in reserve for a credit engagement. The cost of debt capital in real estate financing will rise due to systemic reasons deriving from Basel 2. Banks are and will remain very restrictive with regard to credit allowances, and use of the positive leverage effect will become more difficult. Structured financing, in particular the use of private equity, is the best way to fill a potential financing gap.