How shall Article 147 (8)(b) CRR be interpreted when identifying ‘contractual arrangements that give the lender a substantial degree of control over the assets and the income that they generate’ in the context of real estate financing?
Art. 147 (8) CRR outlines the conditions for the separate identification of corporate exposures as specialised lending exposures. While condition (a) and (c) of Art. 147 (8) CRR are generally uncontroversial, there is a perceived inconsistency in the interpretation of point (b) of Art. 147 (8) CRR across jurisdictions and among competent authorities. Questions arise about what can be considered contractual arrangements that give the lender a substantial degree of control and to what extent the degree of control can be considered substantial where the exposure as such is not classified as being in default.
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