Risk adjustment

The fact that borrowers must pay interest on a loan in accordance with their respective credit rating class as determined by rating. This is a requirement under Basel II. – In Germany, healthy small and medium-sized enterprises in particular have had to pay for loans even to unhealthy companies as a result of the uniform fixed interest rates set by banks. This always leads to an economically undesirable redistribution in favor of weak companies. Scarce financial resources do not end up in the “best host” (to the most favorable allocation of scarce resources). – See probability of default, BaselII, credit rating class, contingent loss, spread of conditions, credit risk premium, Mittelstandsbank, adverse selection, cross-subsidization, Raroc, rating, structural upheaval.

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/