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Basel II och fastighetsbranschen - en scenariostudie av de nya kapitaltäckningsreglernas konsekvenser för fastighetsbranschen

Bonnevier Dudzik, Sophia and Nilsson, Maria (2008)
Department of Economics
Abstract
Banks carry a great responsibility when it comes to the financial systems in our society. Disturbance in the credit system affects both lender and borrower. All financial institutions must therefore carefully estimate their risk exposure. This assessment enables them to cover themselves from losses with appropriate capital buffers as main guardian. In order to prevent bank crises and also to maintain financial stability in general, new regulations concerning analysis and preventive actions were introduced on the 1st of February 2007. The new directive, Basel II, is a more detailed and individualized version of its forerunner Basel I. Basel II contains new capital requirements which could have a major impact on banks´ assessment of... (More)
Banks carry a great responsibility when it comes to the financial systems in our society. Disturbance in the credit system affects both lender and borrower. All financial institutions must therefore carefully estimate their risk exposure. This assessment enables them to cover themselves from losses with appropriate capital buffers as main guardian. In order to prevent bank crises and also to maintain financial stability in general, new regulations concerning analysis and preventive actions were introduced on the 1st of February 2007. The new directive, Basel II, is a more detailed and individualized version of its forerunner Basel I. Basel II contains new capital requirements which could have a major impact on banks´ assessment of companies’ credit risk. It is likely that the alterations in the risk handling will strike harder on some business and sector areas, than on others. Because of its generally high gearing, real estate is a sector that most likely will be heavily influenced by the new regulations. Since Basel II is still in its implementation phase, it is impossible to draw any conclusions about the actual results based on any historical data. However, possible outcomes could be identified by using hypothetical scenarios. This paper aims, by using scenarios, to identify and point out the likely consequences of Basel II on the private housing and commercial building sectors. In the two scenarios that were constructed the focus was laid on the first of Basel II:s funda-mental pillars. With the help of four real estate companies as objects of our study, Brinova, Brogripen, Stena Fastigheter Malmö and Wihlborgs, the possible consequences were analyzed. Variations in the business ratios resulted in a higher risk forecast for the companies with the lowest financial flexibility and therefore also the highest sensitivity to a raise in vacancy rates. (Less)
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@misc{1337030,
  abstract     = {Banks carry a great responsibility when it comes to the financial systems in our society. Disturbance in the credit system affects both lender and borrower. All financial institutions must therefore carefully estimate their risk exposure. This assessment enables them to cover themselves from losses with appropriate capital buffers as main guardian. In order to prevent bank crises and also to maintain financial stability in general, new regulations concerning analysis and preventive actions were introduced on the 1st of February 2007. The new directive, Basel II, is a more detailed and individualized version of its forerunner Basel I. Basel II contains new capital requirements which could have a major impact on banks´ assessment of companies’ credit risk. It is likely that the alterations in the risk handling will strike harder on some business and sector areas, than on others. Because of its generally high gearing, real estate is a sector that most likely will be heavily influenced by the new regulations. Since Basel II is still in its implementation phase, it is impossible to draw any conclusions about the actual results based on any historical data. However, possible outcomes could be identified by using hypothetical scenarios. This paper aims, by using scenarios, to identify and point out the likely consequences of Basel II on the private housing and commercial building sectors. In the two scenarios that were constructed the focus was laid on the first of Basel II:s funda-mental pillars. With the help of four real estate companies as objects of our study, Brinova, Brogripen, Stena Fastigheter Malmö and Wihlborgs, the possible consequences were analyzed. Variations in the business ratios resulted in a higher risk forecast for the companies with the lowest financial flexibility and therefore also the highest sensitivity to a raise in vacancy rates.},
  author       = {Bonnevier Dudzik, Sophia and Nilsson, Maria},
  keyword      = {kreditrisk,fastighetsbolag,Basel II,Finansiella nyckeltal,scenario,Economics, econometrics, economic theory, economic systems, economic policy,Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik},
  language     = {swe},
  note         = {Student Paper},
  title        = {Basel II och fastighetsbranschen - en scenariostudie av de nya kapitaltäckningsreglernas konsekvenser för fastighetsbranschen},
  year         = {2008},
}