The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Germany: Distressed debt will suffer from risk limitation

But lenders will price to encourage trading.

Volker Beissenhirtz, Schultze & Braun

"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". Volker Beissenhirtz, head of the Berlin office of insolvency law specialists Schultze & Braun, says that the bill was originally intended to constrain hedge funds that band together to sway shareholder votes. However, late in the drafting process, extra provisions were inserted that seek to give borrowers more power and protection in the market for non-performing and sub-performing loans, in which foreign funds and banks have been the principal investors. There were an estimated €15 billion in trades in that market last year, he says.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree