# Lump risk

- Canonical URL: https://www.gerhardmerk.de/lump-risk
- Post ID: 589916
- Modified: 2023-07-25T21:03:26+00:00
- Language: en

## Definition

The concentration of a bank's lending among a few individual or interconnected borrowers. Under Basel II, a special risk calculation is required in such cases (for there is a precise link between portfolio lumpiness and risk). Appropriate credit derivatives can be used to mitigate lumpiness risks. - Often, the rules to avoid lumpiness risks were circumvented by setting up several buy-out companies and formally splitting the loans, which was severely reprimanded by the supervisory authorities. - See granularity, group of connected customers, key account, concentration risk, credit derivative, accumulation, submarine effect. - Cf. Monthly Report of the Deutsche Bundesbank of April 2001, p. 26, Monthly Report of the Deutsche Bundesbank of June 2006, p. 35 et seq. (detailed, textbook presentation; overviews). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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