The risk that a bank has made advance payments, especially the raising of capital, but that the project will not be completed at all (the project will be abandoned) or not to the planned end (the project will be put on ice). – There are enough cases where banks have had to accept heavy losses, especially in the case of large projects that were not brought to completion, especially since half-finished projects such as unfinished buildings are not only worthless, but also often cause further costs over a longer period of time. Therefore, in such cases, risk sharing through a syndicated loan is common. An institution can also pass on the exit risk for large projects to the market by way of securitization.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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https://www.gerhardmerk.de/