Basel plans to drop cash flow test for mortgages

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Basel plans to drop cash flow test for mortgages

The Bank for International Settlements (BIS) published its second set of proposals for gauging risk and capital charges under the Standardised Approach on Thursday. It has recommended dropping the debt service coverage (DSC) ratio for mortgages, in favour of relying on the Loan to Value (LTV) ratio, a decision that is expected to hit Dutch banks in particular.

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