Austrian Banks’ Lending and Loan Pricing Strategies against the Background of Basel II

Johannes Jäger () and Vanessa Redak ()
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Johannes Jäger: Fachhochschule des bfi Wien
Vanessa Redak: Oesterreichische Nationalbank

Financial Stability Report, 2006, issue 12, 92-103

Abstract: Although the New Basel Capital Accord (Basel II) makes no direct reference to loan pricing and lending terms, it is widely held that Basel II does, in fact, impact on loan pricing. A survey among Austrian banks on loan pricing strategies after Basel II aimed to identify the potential effects of Basel II on loan pricing. This article summarizes and analyzes the results of this survey and their implications for the Austrian lending business. The survey found a significant trend toward risk-adequate pricing. While it is impossible to predict at this point whether banks will eventually successfully implement this strategy, given the competitive environment, it seems that they are in fact resolved to do. Banks’loan pricing and portfolio streamlining plans concern mostly lending to small and medium-sized enterprises (SMEs), which in credit institutions’ view offers the largest room for maneuver to adjust lending volumes and prices.

Keywords: Banks; Basel II (search for similar items in EconPapers)
JEL-codes: D4 G21 L22 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (2)

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