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 Tomb or Womb: The Freudian Approach to Live Burial in Edgar Allan Poe's 'The Fall of the House of Usher' and 'The Premature Burial' by Christopher Heine
Cover of the book Case Study: Faith Community Hospital by Christopher Heine
Cover of the book Two Levels: Lewis Carroll's Alice Books as Children's Literature and Adult Fiction by Christopher Heine
Cover of the book Fertility in Europe - A sociodemographic analysis by Christopher Heine
Cover of the book Which political forces are responsible for retrenchment in social services in social democratic welfare states? by Christopher Heine
Cover of the book Human resource management: Impact of changes in German labour relations by Christopher Heine
Cover of the book Do political parties still have a role to play in American elections? by Christopher Heine
Cover of the book The Poets and their Times: Wordsworth's - Preface to Lyrical Ballads - and Shelley's - Defence of Poetry - by Christopher Heine
Cover of the book IBM Pilot Head Office (Cosham, Hampshire, 1970-71) and IBM Technical Park (Greenford, Middlesex, 1975-1980) - Architecture as Part of the Market oriented Corporate Culture by Christopher Heine
Cover of the book From 'counterrevolution' to 'revolution' to collapse by Christopher Heine
Cover of the book Bram Stoker: Dracula - The relationship of Jonathan and Mina Harker by Christopher Heine
Cover of the book Northern Ireland in the 1980s by Christopher Heine
Cover of the book Environmental consciousness in USA by Christopher Heine
Cover of the book Why is focusing on women so important in addressing issues of poverty and development for poor nations? Why did the various development organizations neglect to do this for so long? by Christopher Heine
Cover of the book Same Difference 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