A bank’s policy of taking appropriate measures to eliminate individual risks that restrict its business activities. – Such significant individual risks are, above all, – dependence within the framework of a relationship bank link and – specialization in individual industries, countries, regions or currency areas. The main instruments for diversification today are the many forms of credit derivatives, which allow credit risk to be separated from financing business. – See industry concentration, loan-versus-paper business, Gini coefficient, group of connected customers, house bank, Herfindahl-Hirschman index, granularity, clump risk, concentration risk, correlation risk, general, credit derivative, loan securitization, leverage ratio, nonacceptance compensation, true sale securitization. – Cf. Deutsche Bundesbank Monthly Report of June 2006, p. 35 ff. (calculation of all types of concentration risk).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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