The European Association of Co-operative Banks (EACB) is proud to support a joint industry initiative highlighting a crucial point: financial regulation must enable, not constrain, the financing of real estate, as this has an evident impact also on the availability of housing.
Across the EU, a persistent supply-demand gap, rising construction costs and higher interest rates are already making access to housing more difficult — especially for first-time buyers and vulnerable households. At the same time, prudential developments, including the Basel implementation and the output floor, risk increasing capital requirements on low-risk residential lending and reducing banks’ capacity to finance homes and renovations.
Without appropriate measures, capital requirements for mortgage portfolios could rise significantly, reducing the lending capacity of EU banks for housing supply and energy renovation.
Our recommendations to policymakers:
- Make permanent the CRR output floor transitional mechanisms for low-risk residential real estate
- Put forward an extension to the banks which use the standardised approach, while ensuring compliance with the low-risk criteria in Art. 465(8)
- Duly reflect low risk of EU housing market and ensure an harmonised approach across the EU
- Use the upcoming 2026 competitiveness review to assess the real impact of prudential rules on housing finance
For cooperative banks, this issue is a core priority. With deep local roots and a long-standing focus on households and communities, cooperative banks play a key role in financing homes and supporting the real economy.
A balanced, proportionate regulatory framework will help ensure that financial stability and housing affordability go hand in hand.