Translation of "Kreditausfälle" in English

Extensive loan losses have required expensive bank recapitalization operations.amp#160;

This should contribute to a meaningful reduction in loan defaults going forward.

The low credit losses have also helped banks to build up equity capital.

Defaults are inevitable for a certain proportion of borrowers.

In 2013, credit losses were at a reasonable level given the economic circumstances.

More and more loan defaults are coming to the open.

This resulted in gross under provisioning for likely future loan losses.

Entities include such incurred credit losses in the estimated cash flows when computing the effective interest rate.

That review included an analysis of the expected loan losses by external independent advisors.

The Bank’s consistent risk management during the crisis has paid off with an outstanding record of minimal loan delinquency.

As the experience of the recent financial crisis has shown, loan defaults can pose a considerable threat to financial stability.

The loan defaults reach the securitization market.

When calculating the effective interest rate, an entity shall estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment, call and similar options) but shall not consider future credit losses.

If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (ie the effective interest rate computed at initial recognition).

In some cases, financial assets are acquired at a deep discount that reflects incurred credit losses.

Whereas the guarantee agreements covered the necessary value adjustment in respect of the proceeds from non-performing loans, they did not take account of the shortfall in interest on bad loans, which the bank itself thus had to make good.

To apply this Standard, the entity analyses the transaction as (a) a retention of a fully proportionate retained interest of CU1000, plus (b) the subordination of that retained interest to provide credit enhancement to the transferee for credit losses.

The remainder of the consideration received (CU25) represents consideration received for subordinating its retained interest to provide credit enhancement to the transferee for credit losses.

The Italian authorities have not had any similar guarantee schemes in operation in the past, and consequently do not possess any reliable historical or empirical data (on e.g. industry defaults, the revenues of the scheme, or the actual administrative costs of running the scheme) which might have enabled them to demonstrate that the scheme would be self-financing.

In particular , whereas traditional provisioning methods are based on an item-by-item evaluation and provisions are made on the basis of a reduction in the value of the assets when tangible signals are detected , the new methods use a statistical approach to estimate the expected credit losses and the corresponding loss provisions are posted as a liability ( if the actual loss is greater than expected the difference is charged to the loss provision ) .

The IMF does not have an adequate framework for handling the massive defaults that could easily attend a huge surge in lending, much less the political will to distinguish between countries that are facing genuine short-term liquidity problems and countries that are actually facing insolvency problems.