Large value credits

Loans to a borrower that generally equal or exceed ten percent of a bank’s liable equity capital. In general, a reporting obligation applies to such loans; cf. sections 13-14 KWG. In principle, large exposures are limited to a maximum of twenty-five percent of an institution’s liable equity. – See counterparty risk, evidence center working group, Euro evidence, evidence center, Gini coefficient, granularity, Herfindahl-Hirschman index, Klumprisiko, counterparty risk, concentration risk, credit event, credit insurance, million loan, solvency risk, value-at-risk, central credit register. – Cf. Deutsche Bundesbank Monthly Report of October 2002, p. 22 ff, Deutsche Bundesbank Monthly Report of June 2006, pp. 35 ff. (concentration risks in banks’ loan portfolios and their measurement), Deutsche Bundesbank Monthly Report of December 2006, pp. 75 f. (transfer of credit risk mitigation rules to large exposures, p. 84: overview of determination of securitization risk weight), BaFin Annual Report 2006, pp. 112 f. (ways of calculating lower credit risk), BaFin Annual Report 2008, pp. 56 f. (details on the portfolio-based risk-bearing capacity calculation [limit-based backstop regime]; simplification of the reporting system; planned guidelines of the CEBS working group), BaFin Annual Report 2010, p. 123 f. (previous weighting benefits for large exposures in the interbank sector are discontinued), BaFin Annual Report 2011, p. 142 (BaFin’s clarifying regulations based on the CEBS Large Exposures Directive), Deutsche Bundesbank Monthly Report of June 2013, p. 72 (amendment of the Large Exposures and Million Loans Ordinance).

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