The Adaptation of Off-Balance Sheet Financing Techniques in Leasing after the Financial Crisis

Project Start:07/2014
Researchers:Matthias Thiemann
Category: Financial Intermediation
Funded by:LOEWE

A distorted assessment of risk, based upon misleading credit ratings, was one of the main causes of the financial crisis. One mechanism responsible for biased credit ratings is off-balance-sheet financing techniques, used by corporations and banks to optimize balance sheets in order to increase credit ratings. The market for leasing is one of these markets which still offers the opportunity to increase de facto indebtedness without impacting the equity ratio despite regulatory initiatives. The central objective of this research project was to understand how the leasing industry and its regulatory advisors mitigate the impact of regulatory initiatives and reconfigure their offer to corporations to maintain attractive off-balance-sheet treatment.

Related Published Papers

Author/sTitleYearProgram AreaKeywords
Jan FriedrichThe Effect of Academic Literature on Accounting Regulation: Evidence from Leases in Germany
Accounting History Review
2019 Financial Intermediation
Jan Friedrich, Matthias ThiemannDrawing the Line: The Political Economy of Off-Balance Sheet-Financing
2016 Financial Intermediation

Related Policy Publications

Jan Friedrich,
Matthias Thiemann
Why the Initial Regulation of Financial Innovations is Decisive − Regulatory Arbitrage and Off-Balance-Sheet Leasing in Germany
Policy Letter No. 69