Requirements for treating lease exposures as collateralised
Article 211
Institutions shall treat exposures arising from leasing transactions as collateralised by the type of property leased, where all the following conditions are met: (a) the conditions set out in Article 208 or 210, as applicable, for the type of property leased to qualify as eligible collateral are met; (b) the lessor has in place robust risk management with respect to the use to which the leased asset is put, its location, its age and the planned duration of its use, including appropriate monitoring of the value of the security; (c) the lessor has legal ownership of the asset and is able to exercise its rights as owner in a timely fashion; (d) where this has not already been ascertained in calculating the LGD level, the difference between the value of the unamortised amount and the market value of the security is not so large as to overstate the credit risk mitigation attributed to the leased assets.