8 March 2018
Brussels, 8 March 2018
The European Mortgage Federation – European Covered Bond Council (EMF-ECBC) welcomes the European Commission’s Action Plan on Financing Sustainable Growth [link], published today.
In particular, the EMF-ECBC welcomes the commitment by the European Commission to explore the feasibility of recalibrating capital requirements to reflect the potential lower risk of “green” or other sustainable assets, also taking into consideration the recently finalised Basel III Reforms.
This commitment is entirely in line with the Energy Efficient Mortgages Initiative, led by the EMF-ECBC, which seeks to mobilise private bank finance to improve the energy efficiency of the European Union’s building stock, by way of a pan-European energy efficient mortgage product. In addition to delivering a robust and comprehensive framework for the mortgage product, the Energy Efficient Mortgages Initiative will also deliver the data collection and analysis capabilities needed to substantiate the correlation between energy efficiency and lower levels of risk for banks related to these types of loans, and record this data over time. Indeed, like the European Commission, the EMF-ECBC believes that any future adjustment to the prudential framework in this area would necessarily need to be based on solid evidence of lower risk.
The process of collecting and analysing this loan data under the Energy Efficient Mortgages Initiative will begin in June 2018, with the launching of a pilot scheme designed to test the energy efficient mortgage product blueprint at national level with key stakeholders, including a large number of EU banks, property valuers, building performance experts and energy utility companies.
Luca Bertalot, EMF-ECBC Secretary General and Coordinator of the Energy Efficient Mortgages Initiative, said: “We see the European Commission’s Action Plan as a call to act not only for the EU Institutions, but also for market players. As such, through our Energy Efficient Mortgages Initiative and its forthcoming pilot scheme, we are ready to collect and deliver the dataset necessary to evidence the correlation between energy efficiency and financial performance with a view to supporting the European Commission’s analyses in this area.”
More information about the Energy Efficient Mortgages Initiative can be found here.
The European Covered Bond Council (ECBC) is the platform that brings together covered bond market participants including covered bond issuers, analysts, investment bankers, rating agencies and a wide range of interested stakeholders.
