The impact of the euro crisis has left its mark on the banking industry. Foreign loans are particularly affected. Cheap credit from Switzerland is still possible without any problems. By contrast, risk loans have largely disappeared from the market. Reasons and alternatives explains the contribution.
Cheap credit from Switzerland – that’s the way it is possible
People of normal and good credit standing are considered creditworthy anywhere in the world. Repayment-safe borrowers are sought by every financial institution in the world. However, direct lending in almost all countries is only possible for people who also have their first place of residence in the country. It is also advantageous if the income is also earned in the country of origin of the loan. A cheap loan from Switzerland is therefore only possible through the help of a credit intermediary.
The credit intermediary prepares the loan application in such a way that the Swiss bank can approve, in accordance with the applicable statutes. The credit intermediary assumes part of the duties of the bank’s administrator. He verifies the truthfulness of the information, the repayment behavior in the past and much more. In the past, before the Basel Agreements, it was possible to grant risk loans. The Basel Agreements agreed to align the banking industry to a uniform standard. The signatories to the agreements also include Switzerland.
Switzerland is increasingly losing out on risk loans
The Basel II Agreement defines the conditions under which loan trading remains possible and the minimum conditions for granting credit. The main focus is on pillar 1 of the agreement. They define the impact on the Bank’s equity capital for the purpose of issuing risk loans. The equity capital must be disproportionately increased, and as a result, risk loans become unprofitable. Further restrictions resulted from the following decisions Basel III and IV.
The implementation of the resolutions is divided into individual steps. Entrepreneurial loans and loans with bad private credit are no longer worthwhile in the progressive measure for the foreign banks. They are therefore increasingly no longer offered. Worthwhile worthwhile today are secure loans. A cheap loan from Switzerland would also be eligible for approval at any German bank. The cheaper offer is now often as a foreign loan and therefore receives the supplement of the borrower.
Risk loans have been transferred to personal loans
Risk loans remain in demand, as never before. The required credit security is not only a problem for foreign banks. Particularly in Germany, which always acts as a trailblazer, the clerks, in the past, have to reject loan requests that can not be approved.
The beneficiaries of the development are the platforms for personal loans. Private donors are not systemically important and therefore remain free to whom they entrust their money. By the way, the Swiss banks are back in the boat. A cheap loan from Switzerland – as a risk loan – does not come directly from her. But the same bank, which previously lent risk loans, takes over the entire process of the procedure.