Securities lombard loan
The effect Lombard credit is as a form of Lombard loan is a loan to § 488 et seq. BGB, the pledging of securities specialized and can usually only for pre-financing of securities transactions are used. Typical borrowers are consumers . The Lombard loan, on the other hand, is characterized by the pledging of all customary bank securities and can be used for all purposes.
Loan agreement and loan amount
The credit institutions conclude a loan agreement with the borrower which, in addition to the general provisions, also contains the specific regulations for a securities lombard loan . This includes, in particular, keeping the securities account at the same institute and the pledge agreement, which imposes on the borrower a - usually imperceptible - restriction on the disposal of his securities account.
As a rule, it is used to finance the purchase of securities (also known as margin trading ). The partial loan financing of the securities creates a leverage effect (also known as the leverage effect ). This can increase the return on the securities account (or increase losses).
The maximum possible loan amount depends on the lending limit . This is determined by the bank and can be understood by the customer by disclosing the different loan-to-value limits for the individual types of security. Fluctuations in the price of the securities on loan directly change the lending limit and thus the credit line . If the lending limit falls due to the exchange rate, without the credit line being able to be adjusted accordingly, additional collateral rights are triggered (“margin call”). These are covenants . The customer is then obliged to increase the lending value by pledging further securities or to reduce the debit balance accordingly by means of credits / deposits or sales of securities so that the use of the credit line is again lower than the lending limit. If the borrower does not comply with this request, termination rights are automatically triggered (see negative declaration ).
Provision and conditions
The Securities Lombard loan is made available in the form of a current account loan and is secured exclusively by pledging marketable securities, so-called securities. Settlement is usually either the clearing account of the securities account or a separate account to a separation from the intended general purpose checking account and stored there Dispositionskredit sure. In particular, this separation is intended for securities disposition loans as a sub-form of the securities lombard loan, because their purpose is limited exclusively to the pre-financing of securities transactions.
The debit interest for securities lombard loans can tend to be cheaper than for the usual overdraft facilities. The reason for this is the collateralisation by marketable securities, some of which are recognized by banking supervisory law as credit collateral and therefore loans do not have to be backed or have lower own funds . For example, securities lombard loans are currently not to be backed with own funds if they are fully secured with federal bonds.
literature
- Alex Kane, Alan Marcus, Zvi Bodie: Essentials of Investments . Sixth Edition. ISBN 978-0-07-125143-3