Chambers Global Practice Guide: Banking & Finance – 2024 edition now out
We are delighted to announce that the 2024 edition of Chambers Global Practice Guide: Banking & Finance is now available.
Regulatory Environment
In recent years, developments in the German loan market have mainly been shaped by the Capital Requirements Regulation (CRR) and the UCITS V Implementation Act. The CRR (which is based on the Basel III framework) imposes strict capital adequacy requirements on banks and requires them to maintain certain leverage ratios. This heavy regulation has caused regulated lenders to withdraw from certain areas of the lending business, thereby creating a gap.
Since the introduction of the UCITS V Implementation Act in March 2016, which amended the German Capital Investment Code (Kapitalanlagegesetzbuch) and the German Banking Act (Kreditwesengesetz) to allow certain alternative investment funds to originate loans to German borrowers, this gap has gradually been filled by alternative credit providers.
Impact of Recent Economic Cycles
After undergoing a recession in 2023, the German economy was expected to stagnate in 2024 – thus the demand for loans remained low in early 2024 and continues to stay below the level of previous years. Another factor which limits businesses’ need for new loans is their reduced appetite for investments owing to the prevailing economic uncertainty. Nonetheless, although the recovery of the loan market may take longer because of Germany’s weak economic recovery, some growth for the second half of 2024 is expected. The lowering of interest rates by the European Central Bank (ECB) in June 2024 as well as the recent results of the Bank Lending Survey (BLS) of the Deutsche Bundesbank are indicators that the tightening cycle of the banks’ lending criteria may come to an end. However, the loan market will most likely move sideways until the economic uncertainty has been overcome.
Our team
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Dr. Michael Josenhans 合伙人
Frankfurt am Main
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Christina Banz 资深律师
London
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Anouschka Zagorski Special Counsel English Law and Head of English Law Finance
Frankfurt am Main