Bank Confidentiality and the Sale of Loans under Austrian Law
Loans are sold for various reasons. For instance loan sales are sometimes used to create a subsequent syndication of a loan which was originally entered into only bilaterally by the lender and the borrower. Loan sales are also often prompted by the wish of banks to reduce exposure to a certain borrower (e.g. a borrower who faces economic difficulties or has even defaulted) or to certain kinds of borrowers (a bank Transfer may aim at a diversification of its borrowers). A bank may also wish to reduce its loan engagement in general (e.g. in order to enter into more profitable businesses than lending). In recent years especially, the market for loans that are in default or close to being in default (so called ‘‘non-performing loans’’) has grown significantly across the world.