Impact of Interest Rate Increases on Bank Portfolios. Exploring the Mitigated Lower of Market Principle and Loss-Free Valuation in German Commercial Accounting

Language: English

Published by GRIN Verlag, 2024

3389061037 / 9783389061039

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Seller: AHA-BUCH GmbH, Einbeck, GermanyAHA-BUCH GmbH

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Druck auf Anfrage Neuware - Printed after ordering - Seminar paper from the year 2022 in the subject Economics - Finance, grade: 1,3, University of Applied Sciences - Hachenburg Castle, course: Finanzsaufsicht, language: English, abstract: The current rise in interest rates leads to significant losses in the value of banks' own portfolios, especially for small and medium-sized banks. This paper considers how the application of the moderate lower of market principle may, in some circumstances, serve to reduce the negative impact of such an increase in interest rates. Accordingly, the valuation rules of the German Commercial Code in conjunction with the IDW statement on loss-free valuation in the banking book offer considerable scope of discretion for German institutions. The paper first outlines the principles for the classification and valuation of securities in commercial accounting. In this context, the valuation rule of the mitigated lower of market principle is explained and its influence on the formation of a provision for contingent losses in the scenario of a temporary impairment is shown. Furthermore, the IDW's statement on the loss-free valuation of the banking book is presented, according to which the prerequisites and requirements for reclassifications are explained. The aim of the paper is to highlight and categorically present the resulting consequences for banks. These include tax, regulatory and accounting advantages for banks by making full use of the legal framework.…

Seller Inventory # 9783389061039

Title
Impact of Interest Rate Increases on Bank Portfolios. Exploring the Mitigated Lower of Market Principle and Loss-Free Valuation in German Commercial Accounting
Author
Anonymous
Publisher
GRIN Verlag
Publication year
2024
Condition
Neu
Binding
Taschenbuch
Language
English
ISBN 10
3389061037
ISBN 13
9783389061039
Item weight
45 grams
Dimensions
210x148x2 mm

AHA-BUCH GmbH

Einbeck, Germany

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