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Leasing provides a fundamental source of firm funding, especially for small and medium-sized enterprises. A crucial difference from loans and bonds is that the lessor retains ownership rights of the leased asset during the lease term. This facilitates the asset utilization and work-out process and leads to higher liquidation proceeds. Hence, previous findings on the loan and bond loss given default (LGD) are not transferable to the leasing industry. Our analysis is based on a very granular data set covering a great variety of information on the lessee, the leased asset, as well as contractual and transactional characteristics. We examine novel LGD determinants such as an external credit rating, the lessee’s limited liability, and the number of leased assets and collaterals. Moreover, new results on previously explored factors question earlier findings, for example, on the lease contract type. Most importantly, as proposed by Miller and Töws (J Bank Finance 91:189–201, 2018), we analyze two different LGDs, one based on the asset utilization proceeds, the other on repayments. Our results clearly indicate the crucial importance of this separation when analyzing the drivers of the leasing LGD in detail because several determinants affect these LGDs in different ways. Our study assists both lessors and regulators in assessing the effective risk of lease contracts and enables lessors to enhance their risk management and work-out processes.

Zusammenfassung Statt den Tippschein bei einer der Annahmestellen des Deutschen Lotto- und Totoblocks auszufüllen, tippen viele Spieler zunehmend online und nutzen dabei teilweise die Angebote von Drittanbietern. Diese meist an Offshoreplätzen wie Gibraltar, aber auch Malta ansässigen Anbieter veranstalten nicht selber eine Lotterie, sondern bieten Wetten auf den Ausgang einer staatlich organisierten Lotterie (Erstlotterie) an, indem sie deren Ziehungen und Gewinnklassen nachbilden, ohne sich an den jeweiligen staatlichen Regularien für Lotterien zu orientieren. Der nachstehende Beitrag untersucht sowohl aus ökonomischer als auch aus juristischer Perspektive erstmalig die Frage, ob es sich bei den Wett- bzw. Spielverträgen des Anbieters der sog. Zweitlotterie um ein Derivat handelt, das möglicherweise nach dem KWG aufsichtspflichtig ist.

When a problem leaves decision makers uncertain as to how to approach it, observing others’ decisions can improve one’s own decisions by promoting more accurate judgments and a better insight into the problem. However, observing others’ decisions may also activate motives that prevent this potential from being realized, for instance, ego concerns that prompt excessive risk taking. Our experimental study investigates how two features of the social environment influence the effect of observing others’ decisions on individual risk taking and performance. We manipulated (1) the psychological distance to others whose decisions could be observed (and thereby the tendency to seek self-enhancing social comparison) and (2) the opportunity for interaction (and thereby for a cumulative effect of any such tendency on decisions over time and for an effect on social information itself). Because the two features covary in real-world settings, we designed two treatments corresponding to the two natural combinations. Both treatments provided participants with two other participants’ period decisions in a multiperiod problem under uncertainty. No new objective information about the problem could be inferred from these decisions. We predicted that participants who observed the decisions of distant others (who had solved the same problem earlier) would perform better than participants in a control sample without any information about others’ decisions and that participants who observed the decisions of proximal others (with whom interaction could arise) would take more risk and perform worse than those who observed distant others’ decisions. The data corroborate our predictions. We discuss implications for organizational learning.

The Covid-19 pandemic is hitting, directly and indirectly, economies throughout the world. While the pandemic is far from over, countries are searching for ways to enhance a quick recovery of their economies. Among others, the downturn is hampering the access of firms to the financial means necessary for investments. Therefore, facilitating access to financial means is an important component of rescue operations.

Zusammenfassung Trotz des anhaltenden Niedrigzinsumfelds und der damit einhergehenden erhöhten Zinsänderungsrisiken im Anlagebuch ist für diese Risikoart nach den im April 2016 erschienenen, überarbeiteten Basler Regelungen für Kreditinstitute nach wie vor keine Unterlegung mit Eigenkapital gemäß Säule 1 vorgesehen. Diese Festlegung ist zum Teil nicht mit den zuvor in der Konsultationsphase benannten Zielen der Neuregelung vereinbar und kritisch zu bewerten. Die Autoren beschreiben die geänderten regulatorischen Vorgaben und leiten mögliche Motive für die Entscheidung ab. Sie zeigen Schwachpunkte der Neuregelung auf und diskutieren diese im Hinblick auf mögliche Konsequenzen sowohl für einzelne Institute als auch für das gesamte Finanzsystem.

Staatliche Unternehmen allgemein und speziell öffentliche Kreditinstitute werden oft skeptisch gesehen. Ein Grund ist diemöglicherweise bewirkteWettbewerbsverzerrung.Dieser Aspekt wurde beispielsweise in Zusammenhang mit staatlichen Garantien für die früheren Landesbanken intensiv diskutiert, denen derartige Garantien letztlich untersagt wurden. Für die teils daraus entstandenen Förderbanken hingegen sind Staatsgarantien weiterhin zulässig.

Prior literature mostly finds bond yield spreads to be insufficiently explained by credit risk in structural models (the 'credit spread puzzle'). In contrast, several recent results consider credit spreads to consist of credit risk to a substantially larger extent (if not even entirely). We address this dissent in the literature using a different empirical methodology. We utilize the removal of sovereign guarantees for savings banks and state banks in Germany as a unique quasi-natural experiment allowing identification of the credit risk component. During a transition period of over ten years, bonds of the same issuer with and without credit risk could be directly compared. Interestingly, less than 20% of the yield spread is due to credit risk for these bonds.

Poor transparency of asset-backed securities (ABS) exacerbated the latest subprime lending crisis. In response, the European Central Bank introduced the ABS loan-level reporting initiative, obliging originators to disclose quarterly loan-by-loan information. However, does this increase in transparency alleviate the agency problems inherent in securitization? To answer this question, we examine a novel dataset of 107 ABS pools that are backed by more than 2.8 million loans for small and medium-sized enterprises from the first securitization repository in Europe. The results show that the increase in transparency indeed has valuable effects for investors, inducing originators to improve pool performance and diversification for existing as well as newly issued ABS. These effects persist for a large set of control variables and a broad variety of robustness tests.

Do banks with a specialized credit portfolio have superior selection and monitoring abilities? Controlling for the composition of the banks’ loan portfolios, we show that specialized banks have lower loan loss rates. We also see that for more focused German banks in our sample period 2003–2011 the standard deviation of loan loss rates seems to be lower. Moreover, the loan loss rate of a given industry in a bank‘s loan portfolio is lower if the bank has a major exposure to that industry.

In einigen Jahren stehen Sie als Managerin einer Bank vielleicht vor dem Problem, die Entwicklungsperspektiven eines neuen Bankprodukts einschatzen zu mussen. Die kostenintensive Einfuhrung des Produkts lohnt sich fur Ihre Bank nur, wenn Sie damit auch langfristig Erlose erzielen werden. Vor allem bewegt Sie dabei die Frage, ob nicht ein anderer Intermediar dieselbe Leistung besser erbringen konnte. Das ware problematisch, weil Sie dann befurchten musten, schon bald von einer geeigneteren Institution aus dem Markt gedrangt zu werden.

Banken werden wie kaum eine andere Branche umfassend reguliert. Damit soll erreicht werden, dass Glaubiger vor Verlusten geschutzt werden und die Stabilitat des Finanzsystems gesichert wird. Die Hauptinstrumente zur Erreichung dieser Ziele sind Vorschriften uber Eigenkapital und Liquiditat, Offenlegungsvorschriften sowie Mindestanforderungen an das Risikomanagement. Im Anschluss an eine theoretische Grundlegung schliest sich im Kapitel F2 ein Uberblick uber die wichtigsten bankenaufsichtlichen Vorschriften an. Die Grundstruktur der risikobasierten Eigenkapitalanforderungen sowie der risikoinsensitiven Leverage Ratio im Rahmen der Capital Requirements Regulation (CRR) werden erlautert, ebenso wie der Supervisory Review and Evaluation Process (SREP), die Vorschriften zur Bankenabwicklung, die Regulierung von Wertpapierdienstleistungen (MIFIR und MIFID) und die Ausgestaltung der Einlagensicherung. Kapitel F3 gibt einen Uberblick uber den Aufbau und die Aufgaben der verschiedenen Institutionen, die mit der Bankenaufsicht befasst sind.

This paper presents the current structure of banking regulation and banking supervision in Europe. We discuss three main challenges resulting from the specific structure of the European system. Firstly, with the integration of the European banking market, main supervisory tasks were conferred on the European Central Bank (ECB). In consequence, new conflicts of interest arise, because the functions of monetary policy and prudential supervision are no longer separated. Secondly, the prudential supervision by European authorities and national authorities might differ to a certain extent. Although this is reasonable with respect to the proportionality principle, it may affect the domestic competitive environment. Thirdly, the European level playing field is harmed by differences in the supervisory stringency among European countries. We conclude that there is still need for action, and a structural solution is not generally apparent. Instead, incentives need to be corrected to eliminate conflicts of interest and agency problems, in particular regarding implicit bail-out guarantees. The recent introduction of a bank recovery and resolution regime might be a first step in the right direction.

Zusammenfassung Kreditportfolios können breit über alle Branchen diversifiziert oder auf einzelne Branchen fokussiert sein. Die vorliegende Studie ergänzt frühere Analysen dieses Sachverhalts für deutsche Kreditgenossenschaften mittels neuer Daten. Es zeigen sich ein Wechsel von Diversifikations- auf Fokussierungstendenzen und Struktureffekte der Finanzkrise.

We investigate whether small business clients could use revocable credit lines, firstly, in their cash management and, secondly, as a funding source. Since the medium-size bank that provided our unique sample has the right to call these lines and charges considerably high rates for using them, we argue that these lines are particularly suitable for managing short-term liquidity needs. From our findings on how the line terms (line availability, line limit, and charged line rate) depend on a client’s liquidity-at-risk, the duration of its relationship with the bank, and its limit overdrafts, we nonetheless conclude that these lines, although they are revocable, fulfill both purposes.

This paper assesses the effect of banking regulation on bond yields. The costs for banks associated with capital requirements for holding bonds may lead to the demand for a higher compensatory yield. As government debt in particular is treated preferentially, capital costs may determine part of the spread between corporate and government bonds. We introduce a new measure for approximating the part of the spread that is induced by regulatory capital costs. Using German bond price data, we find that the costs associated with capital requirements explain a substantial fraction of the credit spread. Our findings contribute to the debate on whether to abolish the preferential treatment of government bonds in banking regulation and are of relevance for policymakers, banks and investors.

Research on problem solving drawing on the Carnegie School suggests that if a problem is of elevated complexity an appropriate representation is key to tackling it. However, when an appropriate representation is not in the decision maker’s knowledge base, it is unclear what determines whether the decision maker searches for novel representations. We theorize that novel representations can be explored only if the search is cognitively affordable. Yet, as problem complexity increases, the search becomes less cognitively affordable. High complexity obstructs the exploration of novel representations and prompts the exploitation of familiar search rules that requires less cognitive resources. Familiar search rules, however, are typically inappropriate for solving a novel problem when complexity is high. We designed and conducted an experiment to test our theory. Participants tackled a multi-period financial decision problem in an environment featuring rare but potentially payoff-devastating random shocks. Our findings corroborate that, as problem complexity increased, fewer participants explored novel representations and more participants exploited familiar search rules. The participants who explored novel representations performed better than those who used familiar search rules. The challenge of problem complexity therefore highlights the exploration of novel representations as an important direction for the research on search processes.

Vertreter aus der Munsteraner Bankenszene diskutieren uber die mit der neuen, digitalen Welt verbundenen Herausforderungen. Den Banken ist bewusst, dass der Wettbewerbsdruck durch junge, dynamische Unternehmen steigt. Als Antwort entwickeln sie ihre eigenen Losungen und gehen Kooperationen mit bestehenden FinTechs ein. Solange die FinTechs Nischen abdecken, stellen sie keine Gefahr dar.

Im vorliegenden Beitrag wird untersucht, welche Auswirkungen die aktuelle Niedrigzinsphase auf Zinsänderungsrisiken von Kreditinstituten hat. Der Schwerpunkt liegt hierbei auf Zinsänderungsrisiken im Anlagebuch unter besonderer Berücksichtigung des deutschen Bankensystems. Das Anlagebuch ist hinsichtlich dieser Risikoart besonders relevant, da hier für Zinsänderungsrisiken seitens der Regulierungsbehörden keine Eigenmittelunterlegung im Rahmen der ersten Säule gefordert wird. Die anhaltende Niedrigzinsphase kann erhebliche Implikationen für die Risikoübernahme von Kreditinstituten haben, da der Anreiz besteht, durch zunehmende Fristentransformation die geschmälerten Margen aufzubessern und folglich höhere Zinsänderungsrisiken in Kauf zu nehmen. This paper analyzes how the current low-interest-rate environment affects the interest rate risk of banks. The study focuses on the interest rate risk in the banking book with particular emphasis on the German banking system. The banking book is especially relevant concerning this risk category because no capital is required according to Pillar 1 by regulatory authorities. Therefore, the persistently low interest rates can have substantial implications regarding the risk taking of credit institutions because banks may have an incentive to improve narrow margins by increasing maturity transformation and consequently taking more interest rate risk in search for higher yields.