Encumbrance on assets
Encumbrance of assets means limited rights in rem in assets granted by the owner to a third party.
In the case of credit institutions , encumbered assets are given special consideration as they are not available to meet the unsecured claims of creditors. The dependency ratio (proportion of loaded on all assets) plays as a parameter in the banking sector, especially in risk management , creditworthiness analysis, banking regulation and regulatory reporting a role.
In the case of real estate, the encumbrances are recorded in the land register.
Corresponding English terms are asset encumbrance for the encumbrance of assets and asset encumbrance ratio for the encumbrance ratio .
background
The bank's assets are on the assets side of the bank balance sheet . These are primarily credit claims by the bank against its customers, securities and derivatives. In the event of a bank's insolvency , these values are available to meet the demands of the bank's creditors (e.g. holders of the bank's securities or savers).
In order to make their refinancing cheaper, banks use secured forms of financing. The collateralisation means that the credit institution names part of the assets as security and guarantees the creditors a priority claim in the event of insolvency through pledging or other legal instruments. The assets tied in this way are the encumbered assets. The remaining unencumbered assets are available only to the creditors of unsecured claims.
The most important forms of secured financing are:
- Collateralised - includes mortgage bonds , mortgage bonds and asset-backed securities (ABS abbreviated from English asset backed securities )
- Longer-term refinancing operations (LTRO abbreviated from English long-term refinancing operations ) of the European Central Bank (ECB)
- Repurchase agreements (English " repurchase agreements ", abbreviation "Repos")
Exposure rate
The debit rate is the ratio of the sum of the encumbered assets to the sum of all assets of a bank. It indicates how high the proportion of the assets is that is available to the bankruptcy estate for unsecured claims. In order for the code to fulfill this function, however, it must also contain the collateral received from the bank and the collateral passed on by the bank, which would also increase the bankruptcy estate.
Banking regulation
European Union
In the European Union , the Capital Adequacy Ordinance (English abbreviation CRR) regulates the reporting obligations of credit institutions with regard to debits. Art. 100 CRR obliges banks in a summarized form to report the amount of repurchase agreements, securities lending transactions and all forms of encumbrance on assets. In addition, Art. 433 CRR contains regulations on the disclosure of unencumbered assets.
USA and Canada
In the United States and Canada, there are legal restrictions on the amount of covered bonds that can be issued to ensure a sufficient amount of unencumbered assets.
Web links
- Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 646/2012 (PDF; 4.9 MB), accessed on December 21, 2018. In: EUR-Lex .
- Directive 2013/36 / EU on access to the business of credit institutions and the supervision of credit institutions and investment firms, amending Directive 2002/87 / EC and repealing Directives 2006/48 / EC and 2006/49 / EC (PDF; 2 , 0 MB), accessed December 21, 2018. In: EUR-Lex .
- European Banking Authority: EBA final draft implementing technical standards. On asset encumbrance reporting under Article 100 of Capital Requirements Regulation (CRR). (PDF; 461 kB) July 24, 2014, accessed on December 21, 2018 (English).
Individual evidence
- ^ Miguel A. Segoviano Basurto, Bradley Jones, Peter Lindner, Johannes Blankenheim: Securitization: Lessons Learned and the Road Ahead . In: International Monetary Fund (Ed.): IMF Working Papers . tape 13/255 , 2013, ISBN 978-1-4843-1726-6 , pp. 62 ( limited preview in Google Book Search [accessed December 21, 2018]).