Q1 2026 is looming large for Europe’s leasing industry. That’s when the European Banking Authority (EBA) will require asset finance and leasing firms to comply with new supervisory reporting obligations under Basel IV. The rules focus on recalibrated credit risk, collateral haircuts, and risk weight reporting, changes that could reshape the sector’s capital landscape.

EBA Work Programme 2026

At the 22nd Leasing Life Conference in Berlin last week, Professor Thomas Hartmann-Wendels of the University of Cologne delivered a critique of the regulatory status quo. His message was simple but powerful: Basel IV’s treatment of leasing exposures does not reflect the reality leasing companies live with every day.

The dissonance between risk and regulation

Leasing portfolios have repeatedly demonstrated resilience – low loss rates, recoverable collateral, and performance that holds up even under stress, Hartmann-Wendels told delegates. Yet he added that Basel IV’s standardised risk weights and conservative collateral haircuts push capital requirements to levels that are out of step with reality.

For a sector financing Europe’s SMEs, this isn’t just a technical irritation. It distorts competitiveness and constrains investment. Hartmann-Wendels, who is also Head of the Research Institute for Leasing argued that regulators must recalibrate leasing exposures to reflect their empirical characteristics, not treat them like unsecured corporate credit.

Competitive impact

Paul Johnson-Ferguson, Executive Director of Invigors EMEA, sees both challenge and opportunity. “The opportunity for lessors is to reduce their capital usage in leasing by up to 20%,” he said. “This could have a significant impact on the return on equity of the dominant part of the European market, which are the bank-owned lessors.”

His comments highlight the competitive stakes: if recalibration succeeds, leasing could emerge stronger relative to unsecured lending, reinforcing its role in Europe’s financial ecosystem.

Messaging to customers

Hartmann-Wendels urged executives to explain the gap between regulatory models and actual portfolio risk. Johnson-Ferguson added a practical communication angle: “Leasing executives should be saying that the industry did not get everything it wanted – because over the long-term leasing risk is closer to 50% of unsecured lending – but that this is a significant recognition. This will help to distinguish leasing and make it more attractive to their shareholders.”

The message is one of cautious optimism: Basel  IV is imperfect, but it does represent progress in differentiating leasing from higher-risk credit.

Data as leverage

Both voices converged on the same conclusion: data is the lever that will move regulators. Hartmann-Wendels called for top-quality, granular datasets – portfolio performance, recoveries, collateral valuations, and resolution timelines – presented in formats that withstand supervisory scrutiny.

Johnson-Ferguson sharpened the point: “There is a call to action: the cleaner lessors’ data is, the more robust the response will be to the regulators. Work on cleaning up your data, segregating into the relevant sectors and leasing types to provide the maximum possible granular data. If there are anomalies, understand them before submission, so errors can be corrected upstream rather than when the data is being analysed by the EBA or their delegates.”

The Berlin takeaway

The combined message from Berlin was not a complaint but an invitation. Basel IV can be fair to leasing if the sector brings the proof. The risk is lower than the models say; the capital should be too.

With Q1 2026 approaching, leasing leaders face a dual challenge: comply with new reporting obligations and seize the opportunity to reshape regulation through evidence. As Hartmann‑Wendels argued in Berlin, regulators will only be persuaded by hard evidence: good intentions won’t move the needle; robust datasets will.

For executives, the countdown is on. The next quarter is not just about compliance, it could be about shaping the future of leasing in Europe.