Bafin monitors car financiers
Car values collapsed due to Corona crisis
The Corona crisis reduces the value of the cars that serve as collateral for loans. That is why Bafin is now increasingly monitoring German car finance companies, reports the financial news service Bloomberg. The car leasing and car financing companies must now report liquidity and capital ratios to the financial supervisory authorities more frequently. The credit institutions are now being audited more closely than at any time since the financial crisis.
The lockdowns to contain the spread of coronavirus have caused the resale values of cars to collapse and increased financial stress for many borrowers. This combination could force car financiers to make higher provisions and write-offs, fears the Bafin. Normally, the companies are not the focus of the supervisory authorities. Their business model is considered relatively robust, since the loans are usually secured by the vehicles. Bloomberg