As a regulatory term, the totality of all intra-group relationships in a banking group that may give rise to a liability exceeding the equity capital. – Fund set up within a banking group, such as the savings banks, to provide liquidity support in the event of any difficulties encountered by individual members. – An agreement between the participants in a transfer or clearing system to share any loss. This may occur if one or more participants are unable to meet their obligations or if the system collapses. The relevant agreement specifies how the loss, if any, is apportioned to the relevant partners in detail (an agreement between participants in a clearing or settlement system regarding the apportionment of potential losses arising from the default of either a participant in the system or the system itself). – See settlement systems, complex groups, financial conglomerates, holding company, lead supervisor, conglomerate, risk-bearing capacity, TARGET abuse.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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