The Impact of Basel II on Small and Medium sized Enterprises in Germany

Inhaltsverzeichnis (Table of Contents)

• Introduction
  • The current problem and the papers objectives
  • Methodology
• Small and Medium Sized Enterprises in Germany
  • The qualitative aspect
  • The quantitative aspect
  • The economic importance of SMEs in Germany
  • How do SMEs fund their investments?
  • What is their capital structure like?
• Banking regulation and the Basel Accords
  • Regulation and banking supervision
    • Why regulate financial Markets
    • Exhibit: The Asia Crisis
  • From Basel I to Basel II
  • The Basel Committee and its first Capital Accord
  • The current accord's weaknesses and consequences
  • The New Basel Capital Accord
  • Two options for a bank's credit risk calculation
    • The Standardised Approach
    • Internal Ratings-Based Approach
• Rating
  • Definition
  • External rating: importance, agencies, procedures & notations
  • Internal ratings: procedure, example & importance
  • Impact on the rating grades on terms and conditions of loans
  • Impact on SMEs, how well are they prepared for rating?
• Conclusion
  • Consequences and scenarios
  • Outlook for the future

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This dissertation examines the impact of the New Basel Capital Accord on small and medium-sized enterprises (SMEs) in Germany. It aims to highlight the challenges and opportunities that this regulatory change poses for SMEs, which play a significant role in the German economy. The study focuses on the implications of Basel II, particularly on the calculation of minimum capital requirements and the use of internal and external ratings.

• The importance of SMEs in the German economy
• The impact of Basel II on banking regulation and capital requirements
• The role of internal and external ratings in assessing the solvency of SMEs
• The challenges and opportunities for SMEs in adapting to the new regulatory environment
• The potential consequences of Basel II for the future of SMEs in Germany

Zusammenfassung der Kapitel (Chapter Summaries)

The dissertation begins by introducing the current problem and objectives of the study. It then provides a detailed overview of the role of SMEs in the German economy, exploring their economic importance, financing practices, and capital structure. The third chapter delves into banking regulation and the Basel Accords, examining the rationale behind financial market regulation and the evolution of the Basel Capital Accord. The chapter highlights the key features of the New Basel Capital Accord and explains the two options for calculating credit risk, the Standardised Approach and the Internal Ratings-Based Approach. Chapter four focuses on the concept of rating, providing definitions, explaining the procedures for external and internal ratings, and analyzing the impact of rating grades on loan terms and conditions. Finally, the dissertation concludes by exploring the potential consequences and scenarios for SMEs in light of Basel II, providing an outlook for the future.

Schlüsselwörter (Keywords)

This dissertation explores key topics such as small and medium-sized enterprises (SMEs), the New Basel Capital Accord, banking regulation, credit risk, capital requirements, internal and external ratings, and the impact of these factors on the German economy.