Interest escalation clause

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Variable rate clauses ( English interest escalation clause ) are clauses in loan agreements that the lender give the all times unilateral right to loan rate with immediate legal effect to decrease or increase. Even with savings contracts variable rate clauses can be applied.

General

The state interest rate regulation that had existed in Germany since January 1937 ended with the repeal of the Interest Ordinance in April 1967. This stipulated maximum interest rates in the "Debit Interest Agreement" which the banks in the lending business should not exceed and in the " Credit Interest Agreement " the maximum remuneration for the deposit business , but which could also be undercut . Debit interest and credit interest remained very stable, there was no need for adjustment. After the interest rate was released in April 1967, debit and credit interest rates could freely adjust to market developments , which, however, created market risks and, in particular, interest rate risks for market participants . The release of all interest was the reason for the introduction of interest rate change agreements in loan and savings contracts. The banks are pursuing the legally recognized goal of passing on changes in interest rates on the money or capital markets to their customers without the need to amend the contract. Bank customers also have an interest in seeing falling interest rates on their loans and rising credit interest rates on investments .

species

Legally bank is generally between variable rate clauses and Z insanpassungsklauseln ( interest rate clauses distinguished). Sliding interest clauses link the interest rate to a contractually agreed reference value . The interest rate for the borrower only changes if the underlying reference value has changed. Interest adjustment clauses, on the other hand, give banks a margin of discretion because they can unilaterally adjust the interest rate at their own discretion . The interest rate for the borrower changes as soon as a bank decides to adjust the lending rate due to changed refinancing costs. So while with interest rate escalation clauses the reference variable - which cannot be influenced by credit institutions - triggers the change in interest rates, with interest rate adjustment clauses the decision for an interest rate adjustment lies with the credit institutions and is therefore not connected with any automatic control. In addition, in the case of sliding interest rate clauses, the loan interest changes proportionally to the reference value, which does not have to be the case with interest rate adjustment clauses.

Interest escalation clauses have gained in importance under banking law since the BGH ruling in March 1986. According to this, clauses of this type must be necessary as an instrument of adjustment due to uncertain conditions on the money or capital market and specify the reason for their creation and the limits of their exercise. These principles apply not only to corporate finance , but also to consumers .

Market-related interest rate adjustment

It is a contractually based, unilateral right to determine the performance of the lender within the meaning of Section 315 BGB , which is based on an adjustment of the loan interest due to market-related changes. The BGH did not object to this contractual practice. According to this, credit institutions are entitled to increase interest rates when interest rates rise , but are also obliged to lower them when interest rates fall. Such sliding interest rate clauses give the lender the sole power to determine the amount of the interest rate ( interest reservation ). The judgment is based on an adjustment of the lending rate to changed refinancing conditions. As a reference serve Referenzzinsätze , to be laid down in loan agreements, individual contracts into account and public media are accessible. The base interest rate according to § 247 BGB, LIBOR , EURIBOR or EONIA can be used as the reference interest rate . The time series database of the Deutsche Bundesbank is also ideal. If these reference interest rates change, this automatically leads to a corresponding change in the lending rate - even without notification to the borrower.

Interest rate adjustment due to creditworthiness

It is not only market developments that can trigger interest in the banking industry in interest rate changes. Also creditworthiness changes the borrower can have a reason for interest rate adjustments offer, because the loan rate is also a risk premium for the credit risk . The changed probability of default , which is reflected in a deteriorated rating , can represent an objective reason for an interest rate adjustment. The rating is the reference value on which interest rate adjustments are based. Here too, creditworthiness-related interest rate adjustments must be possible in both directions, so that a deteriorated rating leads to an interest rate increase and an improved creditworthiness to an interest rate decrease. Only external ratings from rating agencies can be considered for interest rate change clauses , because the credit institutions have no influence on their rating changes. In the case of internal bank ratings, on the other hand, they have their own discretion because these ratings are dependent on the will of the lender.

In the course of the introduction of Basel II (largely implemented in Germany since 2007 by the Solvency Regulation (SolvV)) and Basel III ( implemented across the EU since 2014 by the Capital Adequacy Regulation ( CRR)) ratings have become very important; accordingly, the credit risk they represent must also be adequately reflected in the lending rate. The rating affects at banks risk weight and the amount of backing a loan with own funds . The specialist literature therefore demands that the originally only refinancing-oriented interest rate adjustment clause should be supplemented by a creditworthiness-oriented one. This type of interest rate change clause is also recognized by case law . The change associated with the change of a specific credit risk to another rating class ( " rating migration ") constitutes an objective reason for an interest rate Im. International credit transactions are such interest rate adjustments - for example in the context of margin grids (English margin grids ) - also recognized.

Individual evidence

  1. ↑ Walther Hadding / Klaus J. Hopt / Herbert Schimansky, Entgeltklauseln in der Kreditwirtschaft und E-Commerce von Finanzinstitut , 2002, p. 95
  2. ^ Mathias Habersack , Interest rate change clauses in the light of the AGBG and the VerbrKrG , WM 2001, 753, 754
  3. ^ Mathias Habersack, Interest rate change clauses in the light of the AGBG and the VerbrKrG , WM 2001, 757
  4. ^ BGH, judgment of March 6, 1986, Az .: III ZR 195/84, BGHZ 97, 212, 213
  5. ↑ BGHZ 118, 126 130
  6. ^ BGH, judgment of March 6, 1986, Az .: III ZR 195/84
  7. ^ BGH, judgment of April 13, 2010, Az .: XI ZR 197/09
  8. ^ Deutsche Bundesbank, deposit and lending rates
  9. ↑ Wolfram Ohletz, Creditworthiness-Oriented Interest Rate Change Clauses according to Basel II , 2007, p. 95
  10. ↑ Carsten Jungmann, Effects of the new Basel Equity Accord (Basel II) on the drafting of contracts for fixed-rate loans , in: WM 2001, 1401, 1403
  11. ↑ BGH WM 1993, 2003, 2004
  12. ↑ Peter Derleder, Transparency and Equivalence in the case of contractual interest rate adjustments , WM 2001, 2029, 2032