Other

Property held as mortgage could in general be taken into account if it meets the requirements set out in Article 214 of the Commission Delegated Regulation (EU) 2015/35 on collateral arrangements. In particular, if it meets the requirements of Paragraph 1 of this Article. However, it is worthwhile to mention that for real estate as collateral the requirements of Art. 214 Paragraph 1a, 1b and 1c might not be fulfilled in many circumstances. This is because it might be difficult to liquidate real estate in a timely manner under certain, particular stressed market conditions. Moreover, real estate prices might not be sufficiently stable in value. The latter particular holds for commercial real estate, which is quite a cyclical market with potentially huge price drops in economic downturns. Finally, for commercial real estate in particular, there often is material positive correlation between the credit quality of the counterparty and the value of the collateral.​