Although this definition is clear, we would appreciate very much a harmonisation across all supervisory definitions regarding real estate (e.g. Basel IV, FINREP, Austrian VERA-V). Therefore, we are seeing challenges regarding the practical application of the definition insofar as there are diverging definitions of real estate exposures applicable in the current supervisory framework. We would recommend to harmonise these as follows: the BCBS 424 para. 69 in connection with para. 63 definition should be applied in all supervisory and statistical reporting in addition to the calculation of RWAs for credit risk.
Although, this definition is clear we see a need for harmonisation similar to Question 3. The current BCBS 424 para. 62 f. also defines a LTV ratio. Thereby, the value of the property must be appraised independently using prudently conservative valuation criteria". Additionally, also the numerator is defined differently (outstanding loan amount and any undrawn committed amount of mortgage loan). Again, we see a need for harmonisation of the prudential legislation."