Masterarbeit aus dem Jahr 2013 im Fachbereich BWL - Investition und Finanzierung Munich
Business School Sprache: Deutsch Abstract: The high leveraged American real estate investment
market dominated by speculators brought about a global financial crisis of epic proportions in
2008. The global financial recession which followed highlighted a gloomy rate of
interdependence in the banking world. It exposed the tight interconnection of the American real
estate market and the structures of the global financial market (Panagopoulos et al. 2009
2-4). In December 2010 the Basel Committee on Banking Supervision published the report ''Basel
III: A Global Regulatory Framework for More Resilient Banks and Banking Systems'' which will be
implemented gradually across the European Union (among others) between 2013 and 2019 and
supplements the existing International Convergence of Capital Measurement Document (Basel II)
which was implemented in 2008 (Basel Committee on Banking Supervision 2013). The reformed
capital and liquidity requirements for banks Basel III is a response to the global financial
crisis and represents a substantial step forward from its predecessor regime Basel II which
already based credit costs on the degree of risk. One of the most significant outcomes of Basel
III will be the enormous rise in the banking industry's capital requirements and the rise in
lending as well as borrowing costs (Basel Committee on Banking Supervision 2013). Real estate
developers heavily depend on debt capital for their projects and partake usually only with a
small amount of equity capital in a project. If the access to bank loans will be limited or
restricted in the future developers will have to adapt their financing model to the new market
conditions and challenges posed by Basel III and take other financing alternatives into
consideration in order to decrease dependence on bank loans (Drucker 2012). Other financing
alternatives might also gain attraction if senior loans become more restricted or the
securities or the equity required by the bank increase so much that the return on investment of
real estate developers will make investments unprofitable or they might not able to provide
these securities. They might not know how to proceed and restructure their financing model
adapting it to a lower amount of senior debt. The increased loan documentation due to Basel III
might take so long that the developer will not be able to realize the project viably anymore
due to fast changing market conditions (Drucker 2012).
