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Author: Philipp Marek Publisher: ISBN: 9783957299147 Category : Languages : en Pages : 0
Book Description
This paper examines how Basel III capital reforms affected bank lending in Ger- many. We focus on the increase of minimum risk-based capital requirements and the introduction of the leverage ratio. The announcement of stricter risk-based capital regulation significantly affected low capitalized banks. The impact depends on a bank's credit risk model, i.e. whether a bank applies the standardized approach (SA) or an internal ratings-based approach (IRBA) to determine risk weights. Low capitalized SA banks significantly cut lending whereas IRBA banks did not ad- just lending volumes. By contrast, low capitalized IRBA banks significantly in- creased collateralization while low capitalized SA banks adjusted collateralization only marginally. Moreover, the impact on SMEs and large companies also differs. In terms of lending, SMEs were affected more strongly, whilst in terms of collateralization the impact on large companies was bigger. The announcement of the leverage ratio had, however, a rather limited impact. We find some evidence that low capitalized banks reduced lending. Furthermore, low capitalized banks somewhat tightened collateral requirements, especially for large companies.
Author: Philipp Marek Publisher: ISBN: 9783957299147 Category : Languages : en Pages : 0
Book Description
This paper examines how Basel III capital reforms affected bank lending in Ger- many. We focus on the increase of minimum risk-based capital requirements and the introduction of the leverage ratio. The announcement of stricter risk-based capital regulation significantly affected low capitalized banks. The impact depends on a bank's credit risk model, i.e. whether a bank applies the standardized approach (SA) or an internal ratings-based approach (IRBA) to determine risk weights. Low capitalized SA banks significantly cut lending whereas IRBA banks did not ad- just lending volumes. By contrast, low capitalized IRBA banks significantly in- creased collateralization while low capitalized SA banks adjusted collateralization only marginally. Moreover, the impact on SMEs and large companies also differs. In terms of lending, SMEs were affected more strongly, whilst in terms of collateralization the impact on large companies was bigger. The announcement of the leverage ratio had, however, a rather limited impact. We find some evidence that low capitalized banks reduced lending. Furthermore, low capitalized banks somewhat tightened collateral requirements, especially for large companies.
Author: Nickels Wieneke Publisher: GRIN Verlag ISBN: 3638338746 Category : Business & Economics Languages : en Pages : 69
Book Description
Bachelor Thesis from the year 2004 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,7 (B+ 68%), Oxford Brookes University, language: English, abstract: This dissertation examines the current discussion about the introduction of the New Basel Capital Accord and the impact it will have on Small and Medium sized Enterprises in Germany. SMEs or the ‘Mittelstand’ are the carrying pillar for the German economy: 20 million employees work for SMEs and produce a value added subject to VAT of 49% of the German economy. These establishments are not only innovative and progressive in the way they conduct their business; its owners and managers are also an important factor for the aggregate demand in Germany. With reflection on the requirements of Basel II the major weaknesses of SMEs are revealed: their provision with own funds is traditionally low compared to large companies and bank loans present a main source of debt finance. Minimum capital requirements are an essential part of banking supervision and banking regulation and help ensuring the financial stability of an economy. Financial stability is vital for a country because it helps to absorb losses and protects consumers from the loss of their investments. This was not so in Thailand when the Asian Crisis started in 1997. One reason for the Asian Crisis, among others, was inadequate banking supervision. The Basel Committee has produced a set of minimum requirements for effective banking supervision which can be applied to every country. The so called ‘1988 Accord’ or ‘Basel I’ is currently being modified into ‘Basel II’ and likely to be introduced in the beginning of 2007. This paper is mainly concerned with the change in the calculation of minimum capital requirements (MCR), i.e. how much capital credit institutes put aside as a cushion against future losses. The main impact of Basel II on SMEs in Germany is that the future calculations of the MRC will depend on the company’s individual solvency and not on a fixed percentage of a loan.
Author: Franz Flögel Publisher: Routledge ISBN: 1351256106 Category : Business & Economics Languages : en Pages : 312
Book Description
In response to the credit crunch during the global financial crisis of 2007–2008, many have called for the re-establishment of regional banks in the UK and elsewhere. In this context, Germany’s regional banking system, with its more than 1,400 small and regional savings banks and cooperative banks, is viewed as a role model in the financing of small and medium-sized enterprises (SMEs). However, in line with the ‘death of distance’ debate, the universal application of ICT-based scoring and rating systems potentially obviates the necessity for proximity to reduce information asymmetries between banks and SMEs, calling into question the key advantage of regional banks. Utilising novel ethnographic findings from full-time participant observation and interviews, this book presents intimate insights into regional savings banks and compares their SME lending practices with large, nationwide-operating commercial banks in Germany. The ethnographic insights are contextualised by concise description of the three-pillar German banking system, covering bank regulation, structural and geographical developments, and enterprise finance. Furthermore, the book advances an original theoretical approach that combines classical banking theories with insights from social studies of finance on the (ontological) foundation of new realism. Ethnographic findings reveal varying distances of credit granting depending on the rating results, i.e. large banks allocate considerable credit-granting authority to local staff and therefore challenge the proximity advantages of regional banks. Nevertheless, by presenting case studies of lending to SMEs, the book demonstrates the ability of regional banks to capitalise on proximity when screening and monitoring financially distressed SMEs and explains why the suggestion that ICT can substitute for proximity in SME lending has to be rejected.
Author: Bernhard Schmid Publisher: ISBN: Category : Languages : en Pages :
Book Description
The New Capital Accord (henceforth, Basel II), is expected to impose dramatic changes on banks and other providers of corporate financing, as well as companies. Literature indicates that small and medium sized enterprises (henceforth SMEs), in general, and in particular German SMEs seem to be affected: Germany has the highest SME density with SMEs comprising 99.6% of all corporations (IMF, 2008), these SMEs are highly dependent on banks for financing (see Jacobson et al, 2006). However, there is huge controversy in the literature concerning how these changes will look, right before Basel II came into effect in the years 2007/2008 in the European Union. In order to explore this effect from a Post-Basel II perspective, the objective of this research project is to establish what effect Basel II will have on corporate financing of SMEs in Germany. The high impact on SMEs (in Germany), combined with controversial evidence from extant Pre-Basel II research, indicates a high relevance to academics and practitioners for this thesis. This thesis is probably the first from a Post-Basel II perspective which covers both the SMEs as well as the financiers' perspective. Based on a structured literature review using the comparative method (Peters, 1998) 'Most Different Systems' evidence is provided that there is no consistent picture regarding the effect of Basel II. Therefore, further research is needed to determine whether the effect in Germany is consistent, from aPost-Basel II perspective, with regards to the conditions which trigger certain mechanisms, from a 'scientific realism' (Smith, 1998) perspective, because the literature indicates that 'positivist generalising' has limited validity. Building on Creswell (2003), an 'exploratory sequential' design was created to test three initial hypotheses (as confirmation or refutation of a theory, see Gujarati, 2003:8): a multi-method design is best suited to the author's philosophical stance of 'scientific realism' by means of triangulation (Robson,2002:174). The result of the initial quantitative phase is based on the analysis of questionnaire data from 125 SMEs and financiers (banks, private equity companies, family offices, providers of alternative means of financing) derived from a probabilistic sample frame in the fourth quarter of 2008. Mathematical models for SMEs and financiers regarding the three initial hypotheses were set-up and tested using the appropriate statistical tests. In order to limit bias by means of a spill-over effect from the financial crises, control questions were used. The subsequent qualitative phase by means of semistructured elite interviews (Saunders et al, 2007:312) between March and May 2009 enabled a valid triangulation and provided in-depth insights into how SMEs can cope best with Basel II. The purposive sample, of 17 'important cases', included company owners and top-level financier executives. In a conclusive quantitative and qualitative synopsis, the three initial hypotheses were acknowledged. However, the qualitative in-depth analysis by means of 'causal networks' (Miles and Huberman, 1994) led to an amendment of the hypotheses as follows: 1. Corporate finance has become different for SMEs because the 'housebank principle' has changed to a 'core bank principle' due to Basel II. Shopping around regarding credits will be more difficult which makes financing more difficult. This could be over compensated by major SMEs, by using non-credit corporate financing which leads to a reduction of the 'house bank' principle. 2. SMEs can cope best with the effect when they: a) proactively engage in rating and improve the parameters, or b) they adjust their strategy as stated in hypothesis 3. 3. Financiers (especially non-bank financiers) will engage in SME corporate finance when they have a sound financial basis/management and when they adjust their strategy in terms of growth with the aim of niche market leadership and when they open up for exit strategies.
Author: Mr.Sami Ben Naceur Publisher: International Monetary Fund ISBN: 1484328302 Category : Business & Economics Languages : en Pages : 54
Book Description
Using data on commercial banks in the United States and Europe, this paper analyses the impact of the new Basel III capital and liquidity regulation on bank-lending following the 2008 financial crisis. We find that U.S. banks reinforce their risk absorption capacities when expanding their credit activities. Capital ratios have significant, negative impacts on bank-retail-and-other-lending-growth for large European banks in the context of deleveraging and the “credit crunch” in Europe over the post-2008 financial crisis period. Additionally, liquidity indicators have positive but perverse effects on bank-lending-growth, which supports the need to consider heterogeneous banks’ characteristics and behaviors when implementing new regulatory policies.
Author: Jeremy Edwards Publisher: Cambridge University Press ISBN: 9780521566087 Category : Business & Economics Languages : en Pages : 274
Book Description
This book analyses the widely-held view of the merits of the 'bank-based' German system of finance for investment, and shows that this view is not supported by evidence from the post-war period. The institutional features of the German system are such that universal banks have control of voting rights at shareholders' meetings due to proxy votes, and they also have representation on companies' supervisory boards. These features are claimed to have two main benefits. One is that the German system reduces asymmetric information problems, enabling banks to supply more external finance to firms at a lower cost, and thus increasing investment. The other is that German banks are able to mould and control managements of firms on behalf of shareholders, and thus ensure that firms are run efficiently. This book assesses whether empirical evidence backs up these claims, and shows that the merits of the German system are largely myths.
Author: United Nations Commission on International Trade Law Publisher: ISBN: Category : Law Languages : en Pages : 96
Book Description
The "Model Law" deals with security interests in all types of tangible and intangible movable property, such as goods, receivables, bank accounts, negotiable instruments, negotiable documents,
Author: International Monetary Fund. Monetary and Capital Markets Department Publisher: International Monetary Fund ISBN: 1475577737 Category : Business & Economics Languages : en Pages : 118
Book Description
This paper evaluates the risks and vulnerabilities of the German financial system and reviews both the German regulatory and supervisory framework and implementation of the common European framework insofar as it is relevant for Germany. The country is home to two global systemically important financial institutions, Deutsche Bank AG and Allianz SE. The system is also very heterogeneous, with a range of business models and a large number of smaller banks and insurers. The regulatory landscape has changed profoundly with strengthened solvency and liquidity regulations for banks (the EU Capital Requirements Regulation and Directive IV), and the introduction of macroprudential tools.
Author: Philipp Marek
Author: Philipp Marek
Author: Nickels Wieneke
Author: Franz Flögel
Author: Bernhard Schmid
Author: 
Author: Mr.Sami Ben Naceur
Author: Jeremy Edwards
Author: Boris Fišera
Author: United Nations Commission on International Trade Law
Author: International Monetary Fund. Monetary and Capital Markets Department