Lending
Lending (in Switzerland and Austria: lending ) is the term used in the credit system to denote object-secured financing .
General
In contrast to blanket loans , a loan ("mortgage loan") involves the acceptance of collateral by credit institutions for the purpose of granting credit. In 1952, Karl Theisinger made a distinction between an independent and an employed mortgage loan . If the loan object is sold for a short time (and is part of the current assets ), it is an independent loan, if it is part of permanent corporate assets as a fixed asset , it is an employee. Often the term lending is only used restrictively for real estate as loan security, but in banking operations this is to be understood as any loan granting secured by a property security . It does not matter whether the loan security (object to be lent) is intended to be liable for other loans or whether the loan is used to finance your acquisition. It is also irrelevant whether the object to be lent belongs to the borrower himself or to a third party security provider .
Types of lending
In addition to land , leasehold rights and residential and partial ownership (for investment loans , real estate financing of residential and commercial real estate ), movable property and rights can also be considered for the loan . This includes general assignment by way of security ( machines , goods ), assignment of vehicles by way of security , pledging of property / rights, assignment of receivables as security (in particular global and blanket assignment for corporate financing , assignment of wages and salaries for consumer loans , bank balances and securities ). A special feature is the loaning of ships that are movable property, but can be borrowed in the ship register as part of ship financing through a ship mortgage and are treated like land. This also applies to aircraft financing, which by § § 26a to § 26f PfandBG be made possible. All assets are normal bank collateral.
Procedure
These normal bank collateral are lent by first subjecting the lending bank to a valuation based on submitted lending documents and the bank's own documents as part of the collateral assessment. The final judgment gives a loan value , from which a certain percentage , the lending limit , maximum as credit may be granted against the collateral object. The LTV finally indicates whether the lending limit is respected in lending taking into account any preloads. In the security agreement - which can be concluded separately or combined with the credit agreement - the assets serving as security are legally transferred to the bank. With this transfer and the loan approval , the loan begins.
Regulatory recognition
The EU- wide capital adequacy regulation (CRR), which has been in force since 2014, recognizes physical security as a so-called credit risk reduction technique . According to this, physical collateral can be deducted from a risk position as "collateral with security deposit" (Art. 4 Para. 1 No. 58 CRR) under certain conditions , which leads to lower capital requirements for banks. For this it is necessary that according to Art. 194 CRR loan collateral is legally effective and enforceable in all relevant legal areas . Art. 207 No. 3 CRR stipulates that loan collateral must meet all contractual and legal requirements for the enforceability of your security interest in your legal system through a legal review and this must be repeated if necessary. This is intended to avoid legal risks which, in the event of legally ineffective or unenforceable security agreements, must be included as operational risks (Art. 4 Para. 1 No. 52 CRR). In extreme cases, depending on the volatility , the collateral must be reassessed daily. According to Art. 194 No. 3b CRR, the collateral must be sufficiently liquid and its value must remain sufficiently stable over time; Timely recovery or retention must be guaranteed (Art. 194 No. 4 CRR). The positive correlation between the collateral and the borrower's creditworthiness must not be very high (Art. 194 No. 4 CRR). This applies, for example, to the granting of a loan to a stock corporation , which is to be secured by pledging its shares . In this context, positive correlation means that the deterioration in the company's creditworthiness is generally accompanied by a decline in the price of the shares on which the loan is held.
Individual evidence
- ↑ Karl Theisinger, credit business and credit policy , in: Karl Theisinger / Josef Löffelholz, Die Bank, Volume 2, 1952, p. 10 f.
