Refinancing risk (risk of refinancing)

The – risk of a bank or company – not being able to meet financial obligations in the event of exceptional conditions on the financial market, such as insufficient market liquidity, – because the required means of payment can only be obtained at very high cost – possibly also as a result of a rating downgrade – or – not at all. This is why we sometimes also speak of market liquidity risk; this is seen as a special case of liquidity risk. – See call risk, maturity transformation risk, liquidity management, funding risk, risk management, forward risk. – Cf. Deutsche Bundesbank Monthly Report of December 2007, p. 62 (backing of this risk with economic capital), Deutsche Bundesbank Monthly Report of September 2008, p. 61 et seq. (funding risks in extreme situations), BaFin Annual Report 2008, p. 56 (regulations for liquidity risk management), BaFin Annual Report 2009, p. 50 et seq. (Basel Committee develops guidelines), and the respective BaFin Annual Report, chapter “International.”

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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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