Germany: Distressed debt will suffer from risk limitation

“No-one knows what kind of impact it’s going to have because we have literally nothing with which we can compare it” Volker Beissenhirtz, Schultze & Braun

Germany’s distressed debt market could be slashed in size by surprise provisions contained in a new bill, published by the country’s ministry of justice on January 23. The Risikobegrenzungsgesetz – risk limitation law – is the first bill to come out of Germany’s heated public debate about the merits of private equity and hedge funds, which has involved these investors being characterized as “locusts”.