Response to discussion on the simplification and assessment of the credit risk framework
Q17. Do you agree with the approach proposed by EBA? Do you see further measures as necessary?
Leaseurope agrees with the analytical framework proposed by the EBA to assess trade‑offs between simplicity and risk sensitivity.
As a further measure, Leaseurope encourages the EBA to explicitly consider specialised business models, such as leasing, as test cases for proportional and risk‑based simplification, in line with forthcoming mandates under CRR Article 495c.
Leasing is a key financing channel for Europe’s real economy, with over €454 billion in new volumes annually (reaching more than 1 trillion EUR in outstandings at the end of the year) and strong relevance for European SMEs, where around 50% rely on it. Its asset-based model enables efficient access to productive, innovative and green investments, complementing traditional bank lending and supporting competitiveness.
Despite this, the prudential framework does not reflect leasing’s low-risk profile. Because lessors retain ownership of assets and can recover value in case of default, loss rates are structurally low. However, current Basel III / CRR III rules overstate risks, leading to disproportionately high capital requirements and disincentivising leasing activity. A more risk-sensitive approach is needed, including differentiated risk weights and better recognition of physical collateral.
Leaseurope considers that adjustments to the prudential treatment of leasing exposures mandated under Article 495c of the CRR fully meet all assessment criteria set out on page 25 of the EBA Discussion Paper. This conclusion is supported by consistent and mutually reinforcing quantitative evidence at national, European and academic level, demonstrating both the economic relevance and the low‑risk profile of leasing.
We therefore call on the European Banking Authority to support leasing as a form of finance that has proven to be both low-risk and sustainable, playing a critical role in Europe’s growth and competitiveness—particularly for European SMEs—and in advancing Europe’s energy autonomy and environmental goals. We welcome the CRR III mandate (Article 495c) to the European Banking Authority (EBA) to assess the risk profile of leasing and its prudential treatment. We are confident that the EBA report will confirm leasing’s low-risk nature and trust that the European Commission and the EBA will adjust the prudential treatment accordingly.