Green Light For Greensill Was Legitimate

Governance, Regulations

A Berlin rating agency remains as a scapegoat

Now it is official: In the city of Mohnheim no failure of the administration could be determined before and in the insolvency of Greensill Bank in Bremen. The responsibility is put on the “investment grade” rating, which was issued by a local rating agency in Berlin. In politics, efforts are made to limit the damage. The top German overseer, responsible for the biggest losses since World War II, is running for the Chancellery.

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Secured Income by Securing Deposits

Agencies, Clients, Regulations

The system of deposit insurance in the private banking industry makes GBB-Rating almost indispensable.

Cologne-based GBB-Rating, a company of the Auditing Association of German Banks, offers credit ratings with a price / performance ratio challenging its US peers. It is approved by the European Supervisory Authorities (ESAs) as an External Credit Assessment Institution (ECAI) for commissioned and unsolicited ratings for the calculation of capital requirements according to BASEL III / IV, CRR and Solvency II Directive. GBB-Rating is supervised by the European Securities and Markets Authority (ESMA) in Paris, which is responsible for all credit rating agencies in the European Union (EU).

The following graphic shows how GBB-Rating (i.e. GBB-Rating Gesellschaft für Bonitätsbeurteilung mbH) is embedded in the relationships between the associations and their subsidiaries:

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The following graph shows active relations and historic relations of managing directors, authorized officers, shareholders and the number of ative or historic relations to other companies:

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Since 1996, GBB-Rating has been active on the German market and increasingly also internationally in other European countries for ratings and credit assessments. With more than 20 rating analysts and around 220 ratings and benchmarking of financial services institutions every year, GBB-Rating is one of the local agencies in Germany and Europe. In the 2018 financial year, an average of 35 employees – excluding managing directors – were employed. The focus of their work is in the financial services sector with particular expertise in assessing banks, building societies and leasing companies. They have also been offering Pfandbrief ratings since 2020.

Assigned ratings and rating reports provide a decision-making basis for management and shareholders, a strengths / weaknesses analysis as a basis for determining the position, starting points for improving opportunity / risk management and monitoring the success and risk factors. The credit rating serves as a negotiating argument for business and refinancing partners as well as an image-promoting marketing tool.

Medium-sized and smaller leasing companies in particular can benefit from a recognized rating when opening up new sources of refinancing at credit institutions and, if necessary, realize advantages or savings potential in the (future) calculation of equity requirements (“leasing risk weight”) through more favorable risk weights.

GBB-Rating offers many years of expertise in the development, backtesting and validation of risk classification procedures (scoring) and data analysis and methodological support for risk management.

Among their services are:

  • Credit assessments: Drawing on many years of experience, detailed knowledge of the relevant processes and risk systems within enterprises, and of clients’ industry and company-specific requirements, GBB-Rating has originated a series of customized rating procedures. Credit assessments focus on banks, building societies, leasing companies and SMEs.
  • Review and validation of risk classifications: The independent support in the review of rating and scoring models in accordance with the requirements for risk classification procedures (MaRisk AT 4.1), quantitative and qualitative validation of the stability, selectivity and failure probability of the models and processes used.
  • Development of risk classification procedures: Development and implementation of individually optimized score cards and rating models as part of risk classification procedures in accordance with MaRisk BTO 1.4.
  • Data analysis: Well-founded portfolio and benchmark analyzes to support decision-making, implementation of various data analyzes to increase transparency and to optimize overall bank management
  • Technical support for risk management: The GBB platform is a tailor-made system solution for optimized information, credit management and credit assessment processes.
  • Service provider for deposit insurance schemes: In addition to designing and supporting the implementation of risk-based contribution systems, GBB also offers backtesting and validation. The design of early warning indicators (e.g. traffic light system, stress tests, reporting, benchmarking) is also one of their areas of responsibility.

Funds are maintained by the banks in such a way that all banks belonging to the deposit protection fund pay in a certain amount annually. The contribution to be made by each bank depends on the company’s turnover and creditworthiness. In Germany, GBB-Rating is commissioned to assess the risk in the private deposit insurance fund. In the statutory deposit insurance scheme, regulatory ratios and external ratings are used as scalar factors.

The voluntary deposit protection fund of the Federal Association of German Banks was founded in 1976 and today exists alongside the statutory compensation scheme of German banks that has existed since 1998.

With the voluntary security fund of the private banks, there was a security limit until December 31, 2014, which is 30% of the relevant liable equity of the respective bank per creditor. In the case of a bank’s liable equity capital of, for example, 100 million euros, the assets of each individual customer are secured with up to 30 million euros, provided the fund has the appropriate funds. The protection limit will be gradually reduced: From January 1, 2015, the protection limit per creditor will be 20%, from January 1, 2020 initially 15% and from January 1, 2025 then 8.75% of the bank’s liable equity capital, which is relevant for deposit protection.

It is crucial for bank customers that banks must inform their customers before opening an account whether or not they belong to the deposit protection fund, Section 23a of the German Banking Act. Today this query can also be carried out online at the Association of German Banks.

The protection of the voluntary deposit protection fund begins where the statutory protection of the compensation scheme of German banks ends. In the event of the insolvency of a participating institution, the deposit protection fund takes over the parts of the deposit that exceed the EUR 100,000 limit up to the respective protection limit.

Bank Rating – Normative Banking Regulation in the Financial Market Crisis

Books

Oliver Everling and Karl-Heinz Goedeckemeyer (publisher): Banking Rating – Normative Banking Regulation in the Financial Market Crisis, 2nd Edition, Wiesbaden 2015, Springer Gabler, http://www.springer.com, Copyright Springer Fachmedien Wiesbaden 2004, 2015, ISBN 978- 3-8349-4734-5, DOI 10.1007 / 978-3-8349-4735-2, eBook ISBN 978-3-8349-4735-2, 529 pages.

Particularly after the financial market crisis, the serious, sound assessment of the creditworthiness of banks is of particular importance. High-ranking experts from various perspectives (banking, auditing, commercial law firms, rating agencies, management consultancy) provide competent, useful assistance in this work. Since the first edition of this book, a plethora of topics has been added, particularly concerning the regulation of banks. Bank ratings are being influenced by state regulations, as hardly ever before. Thus, the focus of the contributions of this editorial work shifted to the resulting issues.

The content:

  • Assessment aspects of the business strategies of European banks
  • Methods of business assessment of banks
  • Interpretation of the bank accounting
  • Implications of ratings for the valuation of banks and bank rating systems
  • Overall bank management and credit risk management
  • Banking regulation
  • Rating and financial market communication

Oliver Everling und Karl-Heinz Goedeckemeyer (Herausgeber): Bankenrating – Normative Bankenordnung in der Finanzmarktkrise, 2. Auflage, Wiesbaden 2015, Springer Gabler, http://www.springer.com, Copyright Springer Fachmedien Wiesbaden 2004, 2015, ISBN 978-3-8349-4734-5, DOI 10.1007/978-3-8349-4735-2, eBook ISBN 978–3-8349-4735-2, 529 Seiten.

person dropping paper on box

Countercyclical Capital Buffer in the Election Year

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To avoid speculation about the state of banks and the economy in the election year, there are no more capital adjustments.

Bank capital should be accumulated when cyclical systemic risk is judged to be increasing, creating buffers that increase the resilience of the banking sector during periods of stress when losses materialise. Since the decision on the formation of equity capital is not left to the banks themselves, but is controlled by the German Federal Financial Supervisory Authority (BaFin), the decisions of BaFin are of high political importance and symbolism.

The countercyclical capital buffer (CCyB) is set every quarter by BaFin which takes into account recommendations of the AFS Financial Stability Committee and the European Systemic Risk Committee (ESRB) when making its decision. The CCyB is part of a set of macroprudential instruments, designed to help counter pro-cyclicality in the financial system.

Unfortunately, these measures themselves have a pro-cyclical effect. The capital requirements and their changes are themselves signals for the market. Exaggerated reactions on the part of market participants are possible, both in the event of easing as well as increased capital requirements.

In response to the corona pandemic, BaFin lowered the CCyB from 0.25 percent to 0 percent in April 2020 and has kept it there ever since. The amount BaFin will set the countercyclical capital buffer after the corona pandemic will largely depend on how the cyclical vulnerabilities and risks in the banking sector develop, writes BaFin: “It is currently not foreseeable when the pandemic will be over.”

In contrast, it is possible to predict when the general election in Germany will take place. The Federal Ministry of Finance is responsible for BaFin. Although being member of only the third strongest party in the German Bundestag, the Federal Minister of Finance is entering the election campaign as a candidate for Chancellor and the top candidate of the Social Democratic Party.

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BaFin’s decision shall help maintain the supply of credit and dampen the downswing of the financial cycle. The CCyB can also help dampen excessive credit growth during the upswing of the financial cycle. BaFin’s decision may therefore not reflect economic realities, but rather the need to keep the issue of the fragility of the economy and the vulnerability of banks out of the election campaign. Normally a quarterly review of the decision would be undertaken.

GRENKE Informs About Fruits of BaFin’s Special Auditor

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Based on an ad hoc announcement, Grenke AG called this morning for a media conference that was scheduled at short notice.

Due to the severe crisis of the company and the still good ratings, the development is receiving special attention. The questions discussed included possible personnel changes on the Executive Board. The interviewed Antje Leminsky, Chair of the Board of Directors of GRENKE AG, and her CFO referred to the Supervisory Board. This corresponds to stock corporation law in Germany and is a normal process.

At the same time, however, it must be stated that the board of directors does not give any hope that the founder of the company, Wolfgang Grenke, might rejoin the company to ensure orderly conditions. Wolfgang Grenke turned 70 on February 3, 2021. If you follow the example of American presidents, it is not yet an age to leave the fate of your life’s work entirely to the younger generation. Therefore it would have been an important signal that the company’s board of directors could be certain of the support of the founder.

Wolfgang Grenke’s personal financial situation is certainly so secure that in a financial sense the development of the company he founded is no longer important for him personally. The following diagram shows eight important holdings by Wolfgang Grenke. His company shares range from 20% to 79.53%. Each of these companies in turn has shares in other companies, sometimes together with companies in which Wolfgang Grenke also holds shares:

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Mazars’ interim report

According to Mazars’ interim report, no findings have been made that cast doubt on the legal validity and economic substance of the lease contracts with outstanding receivables of around EUR 5.6 billion. According to the report, the allegation of money laundering has also not been confirmed. Generally, there is no systematic need for goodwill impairments on acquired franchises. According to the report, the valuations are justifiable despite methodological deficiencies.

Mazars’ report also contains significant points of criticism. For example, Mazars considers it necessary to consolidate the franchise companies. The report also criticised the failure to disclose related parties in previous annual financial statements, the procedure of parts of GRENKE Bank’s customer lending business, and the money laundering prevention process. The report also contains the already known findings in the areas of internal audit and compliance.

APIs Allow Next Generation Financial Services

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Application programming interfaces—or APIs—have already had a fundamental impact on the digital banking industry by creating grounds for an array of new financial products.

According to Marius Galdikas, CEO at ConnectPay, APIs can help further improve financial services, as they create the opportunity to ensure coherent multi-channel services and introduce personalized experiences, fostering repeat usage.

In the payments industry, an API is an intermediary which enables to securely transfer account data between payment service providers (PSPs) and third parties. It is an essential part of open banking, a concept based on open, yet secure access to financial information with the end goal of creating better products for consumers.

According to M. Galdikas, APIs are at the heart of any forward-thinking financial technology company focused on driving innovation. He outlined one example of how APIs can support online businesses to refine the customer experience.

“One crucial consideration for businesses is the consistency at which the services they provide are offered across different digital channels: ‘does it offer the same efficiency, speed, or transparency?’ Ensuring a coherent multi-channel experience may very well be the thing that gives the company that competitive edge. This coherence can be achieved by correctly utilizing APIs – a responsibility that falls upon the payment service provider supporting the business,” explained Galdikas.

“An API is the main element that allows a company to isolate services into something granular and adapt it, with ease, to different channels and platforms. For example, you can easily customize specific elements for different channels, thus creating a more personalized experience for the user, based on the devices used to access the service,” said Galdikas.

M. Galdikas noted that ConnectPay is also looking to utilize APIs by launching a new payment initiation service for their EU-residing merchant customers. The solution will enable them to securely collect funds from their customers’ bank accounts. For this matter, the company is teaming up with Sensedia – experts in managing complex API ecosystems. Outsourcing an API provider gives more room to focus on innovation, as more resources can be diverted towards the product, instead of building the system from the ground up.

Rating of Financial Institutions – Properly Assessing Banks and Financial Services Providers

Books

Zafer Diab and Oliver Everling (publisher): Ratings of Financial Institutions – Banks and Financial Services Correctly Assess, Wiesbaden 2016, Springer Gabler, Springer Fachmedien Wiesbaden, http://www.springer.com/, 217 Pages, ISBN 978-3-658- 04194-6, ISBN 978-3-658-04195-3 (eBook).

The financial crisis leaves a completely different banking landscape. In a very short time not only former big banks disintegrated, but completely different institutions formed from mergers and takeovers. Increased competition among banks is not only under the yoke of an unresolved sovereign debt crisis, but also under increased pressure from banking supervision and the next generation of financial services providers. Many business models were only possible through new information and communication technologies and await probation in practice. The legislation now covers every financial institution and places it under supervision. The book not only highlights the consequences of regulation and competition for banks’ credit rating, but also sets standards, criteria and procedures for assessing the existential risk of other financial institutions.

Zafer Diab und Oliver Everling (Herausgeber): Rating von Finanzinstituten – Banken und Finanzdienstleister richtig beurteilen, Wiesbaden 2016, Springer Gabler, Springer Fachmedien Wiesbaden, http://www.springer.com/, 217 Seiten, ISBN 978-3-658-04194-6, ISBN 978-3-658-04195-3 (eBook).

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Bank Risk Management: Minimum Requirements, Instruments and Strategies for Banks

Books

Oliver Everling and Samuel S. Theodore (publisher): Bank Risk Management: Minimum Requirements, Instruments and Strategies for Banks, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden, http://www.gabler-verlag.de, hardcover, 1st edition 2008, 595 pages, ISBN 978-3-8349-0512-3.

Oliver Everling und Samuel S. Theodore (Herausgeber): Bankrisikomanagement: Mindestanforderungen, Instrumente und Strategien für Banken, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden, http://www.gabler-verlag.de, gebundene Ausgabe, 1. Auflage 2008, 595 Seiten, ISBN 978-3-8349-0512-3.

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Federal Finance Minister’s Speculators

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Issuers must be concerned about the damage to the image of the German financial center caused by the inadequate supervision of BaFIn by the Federal Ministry of Finance.

As part of the federal administration, the Federal Financial Supervisory Authority (BaFin) in Germany is subject to the legal and technical supervision of the Federal Ministry of Finance, within the framework of which the legality and expediency of the administrative activities of BaFin is monitored. For Federal Finance Minister Olaf Scholz, details from his area of ​​responsibility will come to light in the election year 2021.

Employee transactions with stocks or derivative instruments that are related to Wirecard were examined. To this end, all employee transactions reported by employees in the high risk category A between January 1, 2018 and September 30, 2020 were evaluated. The number of transactions which were not reported by the employees of BaFin is not provided. The numbers therefore only relate to those employee transactions that were also displayed by them.

According to the BaFin, the evaluation showed that 510 of the employee transactions reported in the above period were related to Wirecard. 344 deals were stocks and 166 were derivative instruments. This business was done by 85 employees.

The figures suggest an astonishingly high level of financial activity by BaFin employees in their own interests. Obviously, in the federal agency monitored by Olaf Scholz’ Federal Ministry of Finance, self-interest in conducting lucrative speculative transactions has a high priority. In particular, investing in derivative instruments, which BaFin employees around Olaf Scholz (SPD) make active use of, require a large amount of time to monitor issuers and market developments in order to be successful. However, such a high number of these transactions was detected.

The BaFin had to admit anomalies, even about insider trading. According to the special audit, the person concerned was not able to access inside information about their business as intended, i.e. within the scope of their duties. However, she did the deal after the inside information was available in her organizational unit. Because of this and due to other special circumstances, it cannot be ruled out that the person was aware of the inside information. The suspicion of insider trading is therefore in the room and must be clarified further. The BaFin therefore initiated official and personnel law steps and filed a complaint with the responsible public prosecutor’s office.

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Next Generation Financial Services: Digital transformation and new services

Books

Oliver Everling and Robert Lempka (editors): Next Generation Financial Services: Digital Transformation and New Services, Frankfurt am Main 2020, Frankfurt School Verlag, 480 pages, ISBN (print) 978-3-95647-176-6.

The digital transformation of the financial industry is in full swing. On the one hand there are consolidation and cooperation processes between banks and fintechs as well as between fintechs among themselves, on the other hand new digital providers, services and products keep coming onto the market. These new offers open up strategic and market potential for the industry and generate new customer behavior. The entire industry is subject to constant change and a high degree of innovation on the part of both the provider and the customer.

The book presents this digital transformation process in the financial sector and describes various digital services and business cases. Established providers discuss their digital strategy, established fintechs describe their business models and new start-ups present their innovative products and services. The book thus provides a profound overview of the status quo and the further progress of digitization in the financial industry.

The authors come from the financial services industry, fintechs, consulting firms and academia. They give the book a high topicality and practical relevance. The book is aimed at those in the industry who are involved in digital strategy and product development and who are significantly driving the digital transformation of the financial industry.

Oliver Everling und Robert Lempka (Herausgeber): Finanzdienstleister der nächsten Generation – Digitale Transformation und neue Dienstleistungen. Frankfurt am Main 2020, Frankfurt School Verlag, 480 Seiten, ISBN (print) 978-3-95647-043-1.

businessman man suit people

German Authority Gives No Mercy to Insider Trading

Actions, Crime

On January 27, 2021, the Federal Financial Supervisory Authority (BaFin) reported an employee of the securities regulator to the Stuttgart public prosecutor on suspicion of insider trading. The employee had sold structured products with the underlying Wirecard AG on June 17, 2020. On June 18, 2020, Wirecard AG made public that it was not yet possible to obtain sufficient audit evidence about the existence of bank balances in trust accounts totaling 1.9 billion euros. The financial supervisory authority had discovered the suspicion as part of their special evaluation. BaFin immediately fired the employee and initiated disciplinary proceedings.

BaFin tightened the compliance rules for its employees’ private securities transactions in mid-October 2020. Speculative financial transactions, i.e. short-term trading, for example with derivative financial instruments or stocks, have no longer been possible since then.

Double-edged Strengthening of Banks’ Equity

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A few days after the European Central Bank and the German Federal Financial Supervisory Authority (BaFin), the European Systemic Risk Board (ESRB) is now recommending that distributions continue to be restrictive in view of the corona pandemic. General Board of the European Systemic Risk Board held its 40th regular meeting on December 15, 2020.

According to the ESRB, banks, investment firms, insurers and reinsurers should not make any distributions until the end of September 2021, unless they are extremely careful and observe the requirements of the responsible supervisory authorities. The ESRB advises them to set conservative thresholds and take into account the specifics of the individual financial sectors.

With its decision, the ESRB is moving away from its previous position of foregoing distributions across the board. One background is the prospect of a Covod-19 vaccine, which makes even more severe scenarios less likely. The General Board recognised the importance of distributions in enabling financial institutions to raise capital externally.

“The decision of the ESRB is a confirmation of our previous supervisory practice”, comments BaFin President Felix Hufeld. This also applies to the latest ECB decision on this issue. “We support the general appeal unreservedly and make binding decisions in individual cases – if necessary.” Only those companies are allowed to pay out that are sufficiently solid and that comply with the minimum legal requirements even under corona stress conditions.

Although the General Board recognised the importance of distributions in enabling financial institutions to raise capital externally, the question arises as to how government intervention in the dividend policy of financial service providers should not strain their ability to raise equity.

Since the reasons for and extent of such political interventions are difficult to predict for both investors and analysts, investments in banks are becoming less attractive. Since all of the above-mentioned organizations are aware of these implications, the question of whether nationalization of banks can be avoided must be investigated.

At first sight, the restriction on distributions strengthens the equity base, banks’ resilience and thus also the creditworthiness of financial institutions. However, rating agencies need to consider both short-term and long-term implications. The corona-related interventions make it difficult for the rating agencies to make their forecasts.

Genealogy of Country Risk

Definitions, Histories, Read

It is difficult to determine exactly when the concept of country risk was forged. The expression was used as far back as 1967 by Frederick Dahl – then assistant director of the Division of Examinations at the Board of Governors of the US Federal Reserve System – in a research paper addressing the international operations of American banks.

Frederick Dahl states that “an appraisal of the so-called country risk inherent in any foreign credit is the major distinction between domestic and international lending. Besides assessing the creditworthiness of the individual borrower, the bank has to exercise a judgment on political, economic, and social conditions in the country of the borrower as they are likely to affect foreign exchange availabilities at the time of repayment of the loan.”

It was not until 1975–1977 that the notion of country risk began to permeate the economic literature and media. Between 1970 and 1975, the external public debt of low- and middle-income countries soared by 144%, while the share of that debt financed by Western banks climbed from 7.5% to 25%.

This growing exposure to sovereign debt began to worry the US Office of the Comptroller of the Currency (OCC). By 1977, country risk had become a buzzword among bankers and investors. In its annual report released in June 1977, the Bank for International Settlements explained that “country risks [did] add new dimensions to private banking in many ways”; this international institution added that it was “necessary to appraise a country’s overall economic and political development and to relate the data on the amount and the structure of its external indebtedness to a number of macro-economic figures, such as current and prospective foreign exchange earnings.”

Starting in 1977, however, policy makers and academics offered different definitions of country risk. Confusion spread in the following years and remains to this day. The main reason is that country risk experts do not all monitor the same risks; instead, they focus on those risks that impinge on their own respective institutions or clients.

Read more and find all quoted sources in Country Risk: The Bane of Foreign Investors (by Norbert Gaillard, Springer, July 2020).

crop businessman giving contract to woman to sign

Credit Rating and Residual Debt Insurance

Read, Scores

The question of the extent to which the creditworthiness of the borrower has an impact on the take out of a residual debt insurance is repeatedly the subject of discussions, i.e. whether consumers with lower creditworthiness are sold residual debt insurance more often than consumers with better creditworthiness. The German Federal Financial Supervisory Authority (bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) has examined this question. There was also a survey of credit institutions in Germany.

Before lending, credit institutions have to check the creditworthiness of the respective borrower. This also applies to installment loans to consumers. As a result of their creditworthiness check, the credit institutions classify the borrowers in different credit ratings or clusters. The number and definition of the credit rating levels used differ considerably from one institution to the next. The number of existing credit ratings ranges from three clusters to 20 clusters.

The conditions for consumer loans are predominantly – if not without exception – based on the creditworthiness of the borrower. 15 of the 30 credit institutions surveyed stated that the level of the interest rate on the loan depends on the borrower’s creditworthiness. The higher the risk of default of a borrower, the more expensive the loan becomes, and consequently the loan interest payable increases with decreasing creditworthiness.

In contrast, there are institutions with a uniform interest rate for all credit clusters. Here, the customer’s creditworthiness has no effect on the interest on the loan. At other credit institutions, however, the price of the consumer loan was based on a combination of creditworthiness and duration or a combination of creditworthiness, duration and loan amount. In this respect, the creditworthiness of the customer is regularly a price-determining factor among several factors. It could not be determined that generally borrowers with a lower creditworthiness are more often sold residual debt insurance than borrowers with a better creditworthiness.

An industry-standard procedure could not be determined after evaluating the answers. The credit institutions handle the issue individually and differently. For some of the credit institutions surveyed, it is the case that more residual debt insurance tends to be taken out when creditworthiness declines, while the rate of residual debt insurance contracts tends to be lower in good creditworthiness. After all, this affects nine of the 30 credit institutions surveyed. At the other credit institutions, on the other hand, based on the closing rates requested, there was no evidence that if the creditworthiness of the borrower fell, more residual debt insurance was sold than for borrowers with a better creditworthiness.

There was also no uniform picture on the question of whether taking out payment protection insurance has an impact on the pricing of the consumer loan. At different credit institutions, the borrowers of a credit rating cluster pay the same amount of interest on their loan, regardless of whether they have taken out residual debt insurance or not. At four banks, the interest rate for loans with residual debt insurance was even higher than for loans without residual debt insurance; This means that loans in the same credit rating with residual debt insurance sometimes even cost significantly more than loans without residual debt insurance. In the case of one institute, however, the figures presented showed that a consumer loan with residual debt insurance was cheaper in terms of the loan interest rate than the loan without residual debt insurance.

The reasons for the different influences of residual debt insurance on the price of the loan remained largely open. This also applies to the remarkable result, according to which the nominal interest rate for loans with residual debt insurance at various banks was higher than for loans without residual debt insurance.

However, one credit institution explains that there was no direct causal connection in this respect. Rather, the interest rate for loans at this institute depends on the creditworthiness. However, the connection rate of residual debt insurance for online contracts is much lower than for contracts concluded in the branch; at the same time, the interest rates for consumer loans concluded online are significantly lower than the interest rates for loans concluded in face-to-face business. The different pricing of consumer loans with and without residual debt insurance for borrowers in a credit rating cluster would only be the result of the different pricing of consumer loans in online business and in face-to-face business. It has not been clarified whether this explanatory model can also be used as the basis for the higher pricing of loans with residual debt insurance found at other banks. However, this shows the great importance a detailed price comparison at several institutes can have for consumers.

Management Board Members Must Submit a Certificate of Good Conduct for Official Purposes

Certifications, Read, Registrations, Regulations

Depending on their nationality and place of residence, management board members must submit the original copy of a “certificate of good conduct for presentation to a German authority (certificate of good conduct for official purposes)” (document type “O”) issued by the Federal Office of Justice (Bundesamt für Justiz – BfJ). This document is issued in accordance with section 30 (5) of the German Federal Central Register Act (Bundeszentralregistergesetz – BZRG). Alternatively, it could be a “European certificate of good conduct for presentation to a German authority” in accordance with sections 30 (5) and 30b of the BZRG or certificates of good conduct equivalent to those named above, or certifications of reputation assessments performed by supervisory authorities in the country of residence after consultation with the relevant division of BaFin (“equivalent documents”).

The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) provides information on what certificate is used to establish a bank management board member’s reputation rating in its Guidance Notice on management board members. This is pursuant to the German Banking Act (Kreditwesengesetz – KWG), the German Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG) and the German Capital Investment Code (Kapitalanlagegesetzbuch – KAGB).

Management board members who have resided in different countries in the previous ten years must submit certificates of good conduct and relevant documents from each country. The relevant division of BaFin has to be provided with detailed information regarding any legal obstacles to their furnishment. If the relevant documents are already available, they have to be submitted to BaFin together with the other documents to be appended to the notification of intent. However, subsequent submission is also possible.

In countries in which certificates of good conduct are issued by a public agency, other documents may not be used as a substitute. The “certificate of good conduct for presentation to a German authority” should not be confused with the “extended certificate of good conduct” referred to in section 30a of the BZRG.

Section 30a of the BZRG determines the following: An extended certificate of good conduct is issued to a person on request, if the grant is provided for in statutory provisions with reference to this provision or if this certificate of good conduct is required for professional or voluntary supervision, care, education or training of minors or an activity which, in a manner comparable to letter a, is suitable for making contact with minors. Anyone who applies for an extended certificate of good conduct must submit a written request in which the person who requests the extended certificate of good conduct from the applicant confirms that the requirements are met.

Every person who has reached the age of 14 is given a certificate on the contents of the register concerning them on request (certificate of good conduct). If they have legal representation, this is also entitled to apply. The application must be submitted in writing to the registration authority in person or with an officially or publicly certified signature. When submitting the application, the identity and, in the case of legal representation, the power of representation must be proven. The applicant and their legal representative cannot be represented by an authorized representative when submitting the application. The registration authority receives the fee for the certificate of good conduct, keeps two fifths of it and pays the remaining amount to the federal treasury.

If the person making the application lives outside Germany, they can submit the application directly to the registry authority. Sending the certificate of good conduct is only permitted to the applicant. If the certificate of good conduct is requested to be presented to an authority, it must be sent to the authority immediately. The authority must allow the applicant to inspect the certificate of good conduct upon request. The applicant can demand that the certificate of good conduct, if it contains entries, is first sent to a local court designated by him for inspection by him. The registration authority must inform the applicant of this possibility in the cases in which the application is submitted to them. The district court may only grant the applicant person access to it personally. After inspection, the certificate of good conduct is to be forwarded to the authority or, if the applicant objects, to be destroyed by the local court. A foreign applicant can demand that the certificate of good conduct, if it contains entries, is first sent to an official representation of the Federal Republic of Germany designated by him for inspection.

The management board member must submit a request for a “certificate of good conduct for presentation to a German authority” and a “European certificate of good conduct for presentation to a German authority” to his or her local registration office (Meldebehörde) (section 30 (2) sentence 1 of the BZRG) or electronically to the Federal Office of Justice (section 30c of the BZRG). German nationals who reside outside the Federal Republic of Germany may apply directly to the Federal Office of Justice as the registration authority (section 30 (3) sentence 1 of the BZRG).

To allow BaFin to allocate the certificates of good conduct which it receives to the undertaking to which the relevant management board member is to be appointed, the name of the notifying undertaking and the BAK number have to be indicated as the reference. The BAK number is a six-digit number which BaFin assigns to each institution for internal classification purposes. It forms part of the BaFin reference number under which correspondence with an institution is registered and is listed in BaFin’s database of undertakings as the “ID”. BaFin is responsible for issuing and publishing a BAK number. The BAK number of an institute can be found on the website of the Federal Financial Supervisory Authority (www.bafin.de).

The certificate of good conduct for official purposes must be up-to-date, i.e. at the time of notification of intent it may not be more than three months old. The date of the document’s issue will be key for this purpose.

In the event that a certificate of good conduct is to be used within BaFin for further checks as to the reputation of a person, this document may not be more than twelve months old. The Federal Office of Justice will send both the “certificate of good conduct for presentation to a German authority” and the “European certificate of good conduct for presentation to a German authority” directly to BaFin. There is no need to request additional copies for the Deutsche Bundesbank or the auditing association, in the case of credit institutions that are members of one.

Data for Bank Management Board Member’s Reputation Rating

Certifications, Criteria, Read, Registrations, Regulations

The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) provides some insights into what kind of data is used to establish a bank management board member’s reputation rating in its Guidance Notice on management board members. This is pursuant to the German Banking Act (Kreditwesengesetz – KWG), the German Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG) and the German Capital Investment Code (Kapitalanlagegesetzbuch – KAGB).

On the form “Details of reputation, available time and additional mandates“, the management board member has to issue a personally signed and dated declaration providing information on any criminal proceedings and proceedings for administrative offences, decisions under trade law and insolvency or enforcement proceedings. The declaration need not include previously pending criminal proceedings that were terminated for lack of sufficient evidence to support the suspicion of a criminal offence. The same is true in the event that the proceedings were terminated because of a procedural bar.

The declaration need not include previously pending criminal proceedings which resulted in an acquittal or by virtue of which an entry in the Federal Central Criminal Register (Bundeszentralregister – BZR) was deleted or cancelled, or that are not required to be disclosed according to section 53 of the German Federal Central Register Act (Bundeszentralregistergesetz – BZRG).

Section 53 of the Act on the Central Criminal Register and the Educative Measures Register determines convicted person’s duty of disclosure: Convicted persons may refer to themselves as having no previous convictions and need not disclose the facts on which a conviction was based if the conviction does not have to be included in the certificate of good conduct or only in a certificate of good conduct in accordance with section 32 (3) or (4) BZR or is to be deleted. Insofar as courts or authorities have a right to the unrestricted disclosure of information, convicted persons may derive no rights from subsection (1) no. 1 vis-à-vis them if they are instructed about this fact.

Entries which must be deleted from the Central Trade and Industry Register under section 153 of the German Industrial Code (Gewerbeordnung – GewO) need not be mentioned. Section 153 determines that certain entries have to be deleted after a period of time of three years if the amount of the fine does not exceed 300 euros or five years in the other cases. If the register contains several entries, the deletion of an entry is only permissible if the period has expired for all entries. An entry to be deleted will be removed from the register one year after the requirements for the deletion have been met. During this time, no information may be given about the entry. If the entry in the register has been deleted or if it is to be deleted, the administrative offense and the fine decision may no longer be used to the detriment of the person concerned. This does not apply if the person concerned applies for admission to a trade or other economic enterprise, if the admission would otherwise lead to a considerable risk to the general public, or if the person concerned applies for the lifting of a business or other economic enterprise that prohibits the exercise of the trade Decision requested.

According to these stipulations, entries which must be deleted from the Central Trade and Industry Register under section 153 GewO need not be mentioned. On the other hand, criminal proceedings terminated under sections 153 and 153a of the German Code of Criminal Procedure (Strafprozessordnung – StPO) have to be indicated.

A termination under these provisions will not eliminate the assumption of innocence under criminal law; however, irrespective of this the circumstances of the case may give rise to indications for a lack of reputation, particularly in case of proceedings associated with punishable violations of relevant supervisory law, property- or insolvency-related criminal offences or tax offences.

Similar situations in other jurisdictions also have to be indicated. In case of doubt, the relevant division of BaFin should be contacted. These details have to be complete and accurate. In the case of any notifiable proceedings, copies of the rulings, decisions, sanctions, notices or other relevant documents have to be appended. BaFin reserves the right to obtain further information from the competent authorities, where necessary

For an assessment of possible conflicts of interest, on the form “Details of reputation, available time and additional mandates” the management board member must also declare any familial relationships with members of the management and the members of the administrative or supervisory body, both for the notifying undertaking and for its parent undertaking or subsidiary. If no details are provided on the form, this will be deemed a statement of “nil”.

On the form “Details of reputation, available time and additional mandates”, business relationships which could result in a certain degree of commercial dependence on the notifying undertaking have to be indicated as follows: Management board member, undertaking which is managed by the management board member, close relatives of the management board member = spouses, registered life partners, partners in a long-term relationship, children, parents, other relatives who belong to the household of the member. The relationships to the notifying undertaking, parent undertaking of the notifying undertaking and subsidiary of the notifying undertaking have to be disclosed. The nature of this relationship and the manner in which it is conducted have to be described. If no details are provided on the form, this will be deemed a statement of “nil”.

man in blue suit

Professional and Personal Requirements for Persons Appointed as Management Board Members

Certifications, Compliances, Read, Registrations, Regulations

The Federal Financial Supervisory Authority of Germany (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) provided a Guidance Notice on management board members pursuant to the German Banking Act (Kreditwesengesetz – KWG), the German Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG) and the German Capital Investment Code (Kapitalanlagegesetzbuch – KAGB). The following introduces the approach how to check compliance with the law in the context of a forensic rating of financial institutions.

The methodology applies to all credit institutions and financial services institutions supervised by Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht- BaFin) under the Banking Act (Gesetz über das Kreditwesen – KWG) and all payment and electronic money institutions supervised by BaFin under the Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG). It is also intended for undertakings supervised by BaFin under the Capital Investment Code (Kapitalanlagegesetzbuch – KAGB). The Banking Act, the Payment Services Supervision Act and the Capital Investment Code impose stringent requirements regarding the qualifications of a management board member. The major significance of these requirements is reflected in the fact that it is the claim of BaFin to issue a licence only when all conditions are met to conduct banking business and e-money business and to provide financial services and payment services.  The licences under the Investment Code, too, are only issued if the management board members fulfil the professional and personal requirements stipulated in the respective law. BaFin may withdraw this licence if these requirements are no longer fulfilled.

The European provisions were enshrined in the Banking Act through the ” Act on the Implementation of the Directive 2013/36/EU on Access to the Activity of Credit Institutions and the Prudential Supervision of Credit Institutions and Investment Firms and on the Regulatory Alignment to the Regulation (EU) No 575/2013 on Prudential Requirements for Credit Institutions and Investment Firms” (Gesetz zur Umsetzung der Richtlinie 2013/36/EU über den Zugang zur Tätigkeit von Kreditinstituten und die Beaufsichtigung von Kreditinstituten und Wertpapierfirmen und zur Anpassung des Aufsichtsrechts an die Verordnung (EU) Nr. 575/2013 über Aufsichtsanforderungen an Kreditinstitute und Wertpapierfirmen – CRD IVUmsetzungsgesetz) of 28 August 2013, Federal Law Gazette I p. 3395, and the ” Act Amending Laws Relating to the Financial Market” (Gesetz zur Anpassung von Gesetzen auf dem Gebiet des Finanzmarktes – FinMarktAnpG) of 15 July 2014, Federal Law Gazette I p. 934. Moreover, the recommendations of the European Banking Authority “EBA Guidelines on Internal Governance” (GL 44) of 27 September 2011 and the “EBA Guidelines on the Assessment of the Suitability of Members of the Management Body and Key Function Holders” of 22 November 2012 have been transposed into German law. The second edition of this Guidance Notice outlines the professional and personal requirements for persons appointed as management board members under the relevant supervisory legislation. It provides an overview of the associated notification obligations, including the documents which must be submitted. It considers in detail the expanded requirements for management board members resulting from the changes to the Banking Act.

The credit institutions which are members of a cooperative auditing association (genossenschaftlicher Prüfungsverband) or which are audited by the auditing body of a savings bank and giro association (Sparkassen- und Giroverband) are to send the notification and any documents to be appended via their association, together with an extra copy intended for that association. The role of the associations must be observed in Germany.

Since 4 November 2014, the European Central Bank (ECB) has served as the supervisory authority for significant German credit institutions within the scope of the Single Supervisory Mechanism (SSM). The ECB supervises these significant institutions on the basis of national supervisory legislation, except where European law is directly applicable. Significant institutions submit notifications concerning the appointment and resignation of management board members – including all of the documents to be appended – to BaFin and the Deutsche Bundesbank.

The European Central Bank is responsible for assessing the professional suitability, the reputation and the available time of a management board member and will notify the institution of the result of its assessment directly. This assessment is made on the basis of the provisions of the Banking Act. However, the ECB is not bound by an existing national interpretation or administrative practice.

The European Central Bank, BaFin and the Deutsche Bundesbank shall be notified of other activities of a management board member of a significant institution and of any direct participating interests. The notifications and all documents and declarations to be appended must be submitted in German. The following deviating provisions apply to significant institutions directly by the ECB. Where documents are not issued in German, a certified translation or a translation prepared by a publicly appointed or sworn interpreter or translator will be required in addition to the original version. The relevant BaFin division may waive the translation of English-language documents. Significant institutions directly supervised by the ECB may submit the notification as well as all documents to be appended in either German or in English. The notifications prescribed by the Banking Act, the Payment Services Supervision Act and the Capital Investment Code shall be submitted without delay. As a rule, BaFin will no longer assume that a notification has been submitted without delay if a period of four weeks has been exceeded following the decision made by the relevant body. BaFin may require further documents and information if this appears necessary in an individual case. BaFin will not assume the costs associated with the required documents.

On their websites, BaFin and the Deutsche Bundesbank provide the following forms which are to be used for the individual notifications and for the declarations to be made.

Banking Act

  • Personnel changes relating to management board members,
  • Details of reputation, available time and additional mandates,
    • Declaration concerning criminal proceedings and proceedings for administrative offences, decisions under trade law and insolvency or enforcement proceedings,
    • Declaration concerning familial relationships,
    • Declaration concerning business relationships,
    • Details of additional mandates as a management board member or as a member of administrative and supervisory bodies,
    • Details of available time,
  • Secondary activities of management board members,
  • Participating interests of management board members.

Capital Investment Code

  • Personnel changes relating to management board members,
  • Details of reputation,
    • Declaration concerning criminal proceedings and proceedings for administrative offences, decisions under trade law and insolvency or enforcement proceedings,
    • Declaration concerning familial relationships,
    • Declaration concerning business relationships,
  • Secondary activities of management board members,
  • Participating interests of management board members.

Payment Services Supervision Act

  • Details of reputation,
  • Secondary activities of management board members,
  • Participating interests of management board members,

An intention to make an appointment, its realisation, its withdrawal (Banking Act) or a change of this intention to appoint (Banking Act) a management board member shall be reported without delay. The institution or the KAGB undertaking must submit this notification. Management board members within the meaning of the Banking Act and the Payment Services Supervision Act are those natural persons who are appointed according to law, articles of association, articles of incorporation or a partnership agreement to manage the business of and represent an institution organized in the form of a legal person or a commercial partnership. Management board members within the meaning of the Capital Investment Code are those natural persons who are appointed according to law, articles of association, articles of incorporation or a partnership agreement to manage the business of and represent a capital management company as well as natural persons who actually manage the business of the capital management company without being formally appointed as management board members. This notification obligation also applies for the appointment of an acting management board member to fulfil the function of a management board member if the latter is unable to do so.

In its long-standing administrative practice, BaFin has refrained from forwarding appointment notifications submitted by the relevant association of auditors for credit cooperatives’ board members serving in an honorary capacity. However, notice must be provided of an intention to appoint a part-time management board member. Already the intention to appoint a management board member is subject to notification.

Basic documents

The following documents/declarations have to be appended to the notification:

  • Curriculum vitae,
  • Details of management board members’ reputation,
  • “Certificate of good conduct for presentation to a German authority”, “European certificate of good conduct for presentation to a German authority” or “equivalent documents” from another country,
  • Excerpt from the Central Trade and Industry Register,
  • Details of additional mandates as a management board member and in administrative and supervisory bodies,
  • Details of available time.


By submitting the information and declarations from the management board member which have to be appended to the notification, the notifying institution or the notifying KAGB undertaking confirms that the information submitted is accurate to the best of its knowledge. If the management board member who is to be appointed has been, or is already a management board member or a member of the administrative or supervisory body of an undertaking supervised by BaFin, all of the documents/declarations to be presented in connection with this notification have to be re-submitted. BaFin may waive this requirement in individual cases.

A curriculum vitae has to be appended to the notification of intent. This curriculum vitae must be complete and truthful and must be personally signed and dated. The curriculum vitae shall focus primarily on the positions held during the management board member’s professional career. For these individual positions, the CV has to indicate not only the year, but also the month in which this position began or ended. In the description of positions held, in particular details of this person’s powers of representation, his or her internal decision-making powers and the divisions within the undertaking overseen by him or her shall be provided. Job references for employment positions within the last three years prior to submission of the notification have to be appended to the curriculum vitae, if available. Within the scope of the Capital Investment Code and the Payment Services Supervision Act, job references must only be submitted as required by BaFin. The curriculum vitae has to include the following details:

  • surname, all first names,
  • birth namedate of birth,
  • place of birth,
  • place of residence,
  • nationality,
  • a detailed description of relevant education and training,
  • the names of all undertakings for which the management board member currently works or has previously worked,
  • details of the nature and duration of the relevant activity, including secondary
    activities.

If a management board member has resided outside Germany within the last ten years, the period and country in question must be indicated. If the principal place of residence of the management board member and his or her place of work did not lie within the same country, this also has to be indicated. This information is relevant for BaFin insofar as this affects the register excerpts which must be submitted.

The social credit rating is comprehensively checked: Details of the management board member’s reputation, a “Certificate of good conduct for presentation to a German authority”, “European certificate of good conduct for presentation to a German authority” or “equivalent documents” from another country, excerpt from the Central Trade and Industry Register, details of additional mandates as a management board member or in administrative or supervisory bodies (Banking Act), details of available time (Banking Act). Comprehensive additional regulations must be observed for these points.

Rating of Financial Institutions – Properly Assessing Banks and Financial Services Providers

Books

Zafer Diab and Oliver Everling (publisher): Ratings of Financial Institutions – Banks and Financial Services Correctly Assess, Wiesbaden 2016, Springer Gabler, Springer Fachmedien Wiesbaden, http://www.springer.com/, 217 Pages, ISBN 978-3-658- 04194-6, ISBN 978-3-658-04195-3 (eBook).

The financial crisis leaves a completely different banking landscape. In a very short time not only former big banks disintegrated, but completely different institutions formed from mergers and takeovers. Increased competition among banks is not only under the yoke of an unresolved sovereign debt crisis, but also under increased pressure from banking supervision and the next generation of financial services providers. Many business models were only possible through new information and communication technologies and await probation in practice. The legislation now covers every financial institution and places it under supervision. The book not only highlights the consequences of regulation and competition for banks’ credit rating, but also sets standards, criteria and procedures for assessing the existential risk of other financial institutions.

Zafer Diab und Oliver Everling (Herausgeber): Rating von Finanzinstituten – Banken und Finanzdienstleister richtig beurteilen, Wiesbaden 2016, Springer Gabler, Springer Fachmedien Wiesbaden, http://www.springer.com/, 217 Seiten, ISBN 978-3-658-04194-6, ISBN 978-3-658-04195-3 (eBook).

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Bank Rating – Normative Banking Regulation in the Financial Market Crisis

Books

Oliver Everling and Karl-Heinz Goedeckemeyer (publisher): Banking Rating – Normative Banking Regulation in the Financial Market Crisis, 2nd Edition, Wiesbaden 2015, Springer Gabler, http://www.springer.com, Copyright Springer Fachmedien Wiesbaden 2004, 2015, ISBN 978- 3-8349-4734-5, DOI 10.1007 / 978-3-8349-4735-2, eBook ISBN 978-3-8349-4735-2, 529 pages.

Particularly after the financial market crisis, the serious, sound assessment of the creditworthiness of banks is of particular importance. High-ranking experts from various perspectives (banking, auditing, commercial law firms, rating agencies, management consultancy) provide competent, useful assistance in this work. Since the first edition of this book, a plethora of topics has been added, particularly concerning the regulation of banks. Bank ratings are being influenced by state regulations, as hardly ever before. Thus, the focus of the contributions of this editorial work shifted to the resulting issues.

The content:

  • Assessment aspects of the business strategies of European banks
  • Methods of business assessment of banks
  • Interpretation of the bank accounting
  • Implications of ratings for the valuation of banks and bank rating systems
  • Overall bank management and credit risk management
  • Banking regulation
  • Rating and financial market communication

Oliver Everling und Karl-Heinz Goedeckemeyer (Herausgeber): Bankenrating – Normative Bankenordnung in der Finanzmarktkrise, 2. Auflage, Wiesbaden 2015, Springer Gabler, http://www.springer.com, Copyright Springer Fachmedien Wiesbaden 2004, 2015, ISBN 978-3-8349-4734-5, DOI 10.1007/978-3-8349-4735-2, eBook ISBN 978–3-8349-4735-2, 529 Seiten.

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Next Generation Financial Services: The New Digital Power of Customers

Books

Oliver Everling and Robert Lempka (Publisher): Next Generation Financial Services: The New Digital Power of Customers, 1st Edition Frankfurt am Main 2013, Frankfurt School Verlag, 462 pages, ISBN 978-3-940913-62-3.

The Internet and the digital revolution have changed society and the economy on an unprecedented scale. After industries such as publishing or retail have been fundamentally reoriented in recent years, the financial sector is still lagging behind in this development. The book shows how the financial industry is changing and what new business models and opportunities are emerging.

This book is about presenting trends in the financial industry and presenting new business models made possible by the digital revolution and the resulting strengthening of the customer. It identifies adaptation processes and changes that the financial sector faces not only through the potential of the Internet, but also through the use of a wide range of different end-user devices that bank customers of the past will use to communicate with their financial service providers. As a scientifically founded and practice-oriented compendium, the book offers concrete benefits for investors and decision-makers.

It will address internet industry readers as well as bankers and other financial service providers, as well as rating agencies, venture capitalists, seed financiers, business angels, investors, consultants, headhunters, academics and business journalists.

Oliver Everling und Robert Lempka (Herausgeber): Finanzdienstleister der nächsten Generation: Die neue digitale Macht der Kunden, 1. Auflage Frankfurt am Main 2013, Frankfurt School Verlag, 462 Seiten, ISBN 978-3-940913-62-3.

Legal Issues in Ratings

Books, News, Notching, Platforms, Procedures, Registrations, Regulations, Repositories

Ann-Kristin Achleitner and Oliver Everling (Editor): Legal Issues in Ratings: Fundamentals and Implications of Ratings for Agencies, Investors and Companies Advised, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden 1st edition November 2005, http://www.gabler-verlag.de, hardcover, 470 pages, ISBN 3-409-14314-9.

The issuing of ratings by external rating agencies as well as internal ratings are of increasing relevance for the refinancing processes as well as for investment decisions on the part of investors. The book outlines the main legal implications of ratings for agencies, investors and rated companies.

Ann-Kristin Achleitner und Oliver Everling (Herausgeber): Rechtsfragen im Rating: Grundlagen und Implikationen von Ratings für Agenturen, Investoren und geratete Unternehmen, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage November 2005, http://www.gabler-verlag.de, gebundene Ausgabe, 470 Seiten, ISBN 3-409-14314-9.

Bank Rating

Books

Oliver Everling and Karl-Heinz Goedeckemeyer (publisher): Bank Ratings: Banks under Scrutiny, Dr. Th. Gabler, Wiesbaden 1st edition April 2004, http://www.gabler-verlag.de, hardcover, 581 pages, ISBN 3-409-12513-2.

There is a close correlation between the rating of a bank or savings bank by a rating agency and the rating created by a credit institution: Only if the bank is able to correctly assess and manage its own risk potential can it receive a positive rating from a rating agency. This is of central importance, because credit rating agencies de facto dictate to banks on what conditions they can place financial instruments on the international money and capital markets and obtain capital and thus fulfill their economic functions.

In this anthology, renowned experts give a practical insight into the process of bank rating, explain prerequisites for a good rating and explain instruments and methods of risk identification and control. The book also provides impulses for the theoretical discussion of the role of rating agencies.

Oliver Everling und Karl-Heinz Goedeckemeyer (Herausgeber): Bankenrating: Kreditinstitute auf dem Prüfstand, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage April 2004, http://www.gabler-verlag.de, gebundene Ausgabe, 581 Seiten, ISBN 3-409-12513-2.