Has the Financial Crisis Induced a Credit Crunch for Small and Medium-Sized Enterprises in Germany?

Hat die Finanzkrise zu einer Kreditklemme für KMU in Deutschland geführt?

Business & Finance
Cover of the book Has the Financial Crisis Induced a Credit Crunch for Small and Medium-Sized Enterprises in Germany? by Christopher Heine, GRIN Publishing
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Christopher Heine ISBN: 9783640382170
Publisher: GRIN Publishing Publication: July 24, 2009
Imprint: GRIN Publishing Language: English
Author: Christopher Heine
ISBN: 9783640382170
Publisher: GRIN Publishing
Publication: July 24, 2009
Imprint: GRIN Publishing
Language: English

Master's Thesis from the year 2009 in the subject Business economics - Miscellaneous, grade: 1,3, Otto Beisheim School of Management Vallendar, language: English, abstract: The following MBA-Thesis analyses how the financial crisis has affected different pre-conditions for the credit lending behaviour of banks. Additionally the demand for loans of potential borrowers will be considered. A 'credit crunch' is defined as a restriction of the credit supply which leads to a mismatch of supply and demand. It will be shown that the financial crisis caused a still ongoing macroeconomic contraction. The macroeconomic contraction has a direct effect on the calculation of rating grades which downgrade. Parameters of credit risk assessments will be analysed and their pro-cyclicality will be tested. Corporate rating grades already downgraded significantly in 2008. The downgrading of firms has an effect on the credit pricing which influences also the credit demand. This effect will be shown by explaining a basic cost-plus loan pricing model. The sensitivity of the loan pricing towards changes of attributed capital, refinancing costs and cost of default will be exemplarily shown. It will be shown that the rating downgrades have a significant effect on the credit price. This price increase which might affect the demand is however per definition not a 'credit crunch'. The Basel II Accord regulation links the requirements for banks' capital to rating grades. Prior to the financial crisis the capital of banks has already been close to the regulatory minimum level. This made the banks vulnerable for impairments on assets. As new sources for capitalisation and possibilities to off-balance assets are currently limited banks have to reduce risk-weighted assets to fulfil the minimum capital requirements. A reduction of risk-weighted assets could be inter alia done by a restrictive corporate lending policy. The restrictions on banks' capital will not decrease quickly as especially impairments on the credit book might increase due to upcoming defaults. Nevertheless a supply restriction gets only visible if the demand for credits is robust. The demand correlates among other points especially to the investments which have decreased since the end of 2008.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Master's Thesis from the year 2009 in the subject Business economics - Miscellaneous, grade: 1,3, Otto Beisheim School of Management Vallendar, language: English, abstract: The following MBA-Thesis analyses how the financial crisis has affected different pre-conditions for the credit lending behaviour of banks. Additionally the demand for loans of potential borrowers will be considered. A 'credit crunch' is defined as a restriction of the credit supply which leads to a mismatch of supply and demand. It will be shown that the financial crisis caused a still ongoing macroeconomic contraction. The macroeconomic contraction has a direct effect on the calculation of rating grades which downgrade. Parameters of credit risk assessments will be analysed and their pro-cyclicality will be tested. Corporate rating grades already downgraded significantly in 2008. The downgrading of firms has an effect on the credit pricing which influences also the credit demand. This effect will be shown by explaining a basic cost-plus loan pricing model. The sensitivity of the loan pricing towards changes of attributed capital, refinancing costs and cost of default will be exemplarily shown. It will be shown that the rating downgrades have a significant effect on the credit price. This price increase which might affect the demand is however per definition not a 'credit crunch'. The Basel II Accord regulation links the requirements for banks' capital to rating grades. Prior to the financial crisis the capital of banks has already been close to the regulatory minimum level. This made the banks vulnerable for impairments on assets. As new sources for capitalisation and possibilities to off-balance assets are currently limited banks have to reduce risk-weighted assets to fulfil the minimum capital requirements. A reduction of risk-weighted assets could be inter alia done by a restrictive corporate lending policy. The restrictions on banks' capital will not decrease quickly as especially impairments on the credit book might increase due to upcoming defaults. Nevertheless a supply restriction gets only visible if the demand for credits is robust. The demand correlates among other points especially to the investments which have decreased since the end of 2008.

More books from GRIN Publishing

Cover of the book Ideas of 'Managing' Natives in Stevenson's 'The Beach of Falesá' and Buchan's 'Prester John' by Christopher Heine
Cover of the book Why do Cities develop? And why they are different in size? by Christopher Heine
Cover of the book Computer Mediated Communication by Christopher Heine
Cover of the book Business Strategy of British Airways. A Case Study by Christopher Heine
Cover of the book The Media System in Russia by Christopher Heine
Cover of the book Beeinflusst die Persönlichkeit eine Partnerbeziehung oder die Partnerbeziehung unsere Persönlichkeit? by Christopher Heine
Cover of the book Medien im Kontext von Politik by Christopher Heine
Cover of the book Stock repurchase and abnormal returns in den USA and Germany by Christopher Heine
Cover of the book Miscarriages in the British legal system. 'The Guildford Four' and 'The Birmingham Six' by Christopher Heine
Cover of the book Fathers and daughters in selected Shakespearean plays by Christopher Heine
Cover of the book A Brief Report on Data Breaches in U.S. Healthcare. What, Why, and How? by Christopher Heine
Cover of the book Development: Theory and practice by Christopher Heine
Cover of the book Föderalismus in der Bundesrepublik Deutschland von 1970 bis 1989 by Christopher Heine
Cover of the book Global Corporate Strategy - Honda Case Study by Christopher Heine
Cover of the book A chapter review of 'Psychosomatic Persons and Reclothed Skeletons: Images of Resurrection in Spiritual Writing and Iconography' by Christopher Heine
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy