Credit enhancement

Generally, measures taken with the aim of reducing credit risk and improving the credit rating of a security. – A contractual agreement under which the bank retains or assumes a securitization position itself. It thereby provides additional protection against loss to a certain extent to other parties to the transaction. – See loan commitment, irrevocable, moral hazard, single master liquidity conduit, securitization, waterfall principle, special purpose vehicle.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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