...Support-Driven Ratings: Fitch Ratings' Issuer Default Ratings (IDRs) of the eleven EU development banks (DB) are at the same level as their sovereign and regional state owners' Long-Term IDRs. Most DBs ratings are based on the explicit support of their sovereign or, in the case of the three German state DBs, federal state owners, which can take the form of statutory or contractual guarantees for liabilities or assets. Opportunities from State Sponsorship: Fitch believes that state support for the DBs is not affected by the EU Bank Recovery and Resolution Directive (BRRD) and by the Single Resolution Mechanism (SRM) for banks in banking union countries. Some DBs are explicitly excluded in the BRRD from resolution and restructuring measures. Funding and capital benefits from state sponsorship present opportunities for development banks to expand project finance and long-term loans, while for commercial banks regulation is making these less viable. Most German DBs Subject to BRRD: The German...
