Back office

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Under -office is understood in the banking system are not directly related to customer contact entrusted divisions , the structural organization must be separate from the "market areas".

General

This separation of functions of the customer-oriented departments of organizational units with purely internal bank tasks to conflicts of interest by the two-man rule and prevent the independence true. Such a separation is only intended for the lending business under banking supervisory law . The market area ( English front office ) are there areas that banking acquire or initiate. About customer contact have concretely in the market sector in particular, the customer service and sales , while especially the credit processing , credit analysis and risk control to back office ( English BackOffice belong). This does not rule out that credit analysts may come into direct contact with the borrower , for example as part of the creditworthiness check , in order to obtain direct information about his creditworthiness . Conflicts of interest could arise here if the mere positive influence of the borrower - without reference to the loan documents and his creditworthiness - would have a positive effect on the rating .

Legal bases

In order to avoid such conflicts of interest, banking supervisory law provides for an organizational separation between front and back office. On the basis of § 25a para. 1 KWG has accordance BTO 1.1 Tz. 1 MaRisk a bank separation between market and back up to the plane of the management needs. Intensive support , problem loan processing and risk provisioning must also be located on the back office side . The credit decision is made in accordance with BTO 1.1 Item 2 Front Office and Back Office by two votes in favor. As a rule, a credit decision consists of two independent decisions (“votes”) that the two departments have to make for the same credit . As a rule, these agree and a credit decision or rejection is made. If they do not match, there is a conflict . The back office alone decides on counterparty and issuer limits ; one vote is sufficient for credit transactions that are not particularly risk-relevant.

In the securities business , financial analysts and their financial analyzes are to be separated from investment advice and issuer advice .

Credit process

This separation has some special features for the bank's internal credit process . The credit analysis autonomously creates the loan application and the rating of the borrower and is therefore responsible for the focus of the quantitative analysis. The market side gives its second vote on this, but can intervene and thus trigger an escalation process into higher internal bank hierarchy levels ; however, the back office can make the final decision. Differences of opinion between the two areas can arise due to their different interests, because the front office wants to conclude deals , while the back office focuses on the credit risk - which tends to prevent business . Different assessments can also be the result of changed environmental conditions and new findings.

Web links

Individual evidence

  1. ↑ Wolfgang Portisch, restructuring and insolvency from a banking perspective , 2014, p. 106
  2. ↑ BAFin, Circular 09/2017 (BA) - Minimum Requirements for Risk Management - MaRisk of October 27, 2017, reference BA 54-FR 2210-2017 / 0002
  3. ↑ Tobias Volk, Internal Ratings in the Corporate Customer Lending Business, Including the Related Liability Issues , 2008, p. 31
  4. ↑ Philipp Heldt-Sorgenfrei, Lending Business in the Context of the Basel Regulations , in: Oliver Everling / Jens Leker / Stefan Bielmeier (eds.), Credit Analyst , 2015, p. 16