Abstract
On December 7th 2017, the Basel Committee on Banking Supervision (BCBS) published the first completed draft of the finalisation of the Basel III regulation for credit institutions. One of the BCBS's main focuses in this revision was on the calculation of capital requirements for credit risk using internal models. In order to limit that part of the risk-weighted asset variability which is not intended from a regulatory perspective, banks will have to consider input floors and an output floor. These rules are attributed to significant - partly intended, partly unintended - consequences, especially for traditionally low-risk financing. Using the example of real estate and lease financing, this study illustrates that, in addition to the intended consequences, the new regulatory requirements can also incentivize banks to shift their business in favor of riskier financing.
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