Banding together for SME credit risk analytics

Germany’s banking associations are taking a leading role in getting the country’s fragmented banking sector ready to comply with the Basel II capital Accord. Germany’s savings banks association, in particular, says it has internal ratings-based systems that are among the world’s best. Carola Schenk reports


Until a few months ago, Germany was threatening to veto the Basel II capital Accord over its capital treatment of lending to small and medium-sized enterprises (SMEs) – those with annual sales of less than e50 million. Germany feared the Accord would impose unduly high capital levies on its banks’ lending to the Mittelstand, Germany’s SME sector and the backbone of its economy. More than 90% of German companies fall into this category.

The issue was resolved in July, when the Basel Committee on

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