Loan Loss and Mortgage Loan Servicing Databases

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Description

The New Basel II Capital Accord is being introduced in the EU Directive on Capital Requirements which will be transposed into regulations on January 1st 2008. Basel II gives the possibility of applying a lower risk weighting for loans secured by residential (from 50% to 35%) and commercial mortgages (from 100% to 50%) provided that the real estate market is "mature and well developed so as to ensure sufficiently low losses rates" from mortgage loans.

In order to be able to appreciate the compliance with these conditions, a set of banking system databases has to be set up (e.g., real estate prices, defaults and foreclosure recovery values).

Impact Drivers

Public: To lower capital requirements
Private: To improve customers’ accessibility to mortgage lending without impairing the soundness of banking industry; To offer better instruments to the authorities in the process of maintaining the financial stability.

Economics

As of June 30th, 2006 the total exposure from mortgage loans was of about EUR 3.2 billion (the exposures from the loans having as collateral a mortgage on residential or commercial buildings should also be taken into account).

SPI Committee Involvement
To facilitate the establishment of appropriate databases complying with NBR requirements in respect of a key feature of the new capital adequacy framework. Additional Information on SPI Committee.

Working Group

Mirela Bordea	Project Owner (PO)
Ovidiu Bordeut	Project Manager (PM)
Beatrice Popescu	Deputy Project Manager (DPM)
Mirela Palade	Deputy Technical Project Managere (DTPM)
Members
Angela Margarit	Expert, National Bank of Romania
Tudor Boengiu	Inspector, National Bank of Romania
Daniel Sava	Risk Manager, Unicredit Tiriac Bank
Sorin Vlad	Senior Risk Manager, Unicredit Tiriac Bank
Andrei Burciu	Manager Raiffeisen Bank Romania