DIW Berlin (Copyright)  DIW Roundup Logo
Debate, 21 May 2015

Small and medium-size enterprises (SMEs) are highly dependent on bank financing, which is why they have been particularly hit by tighter credit conditions in the aftermath of the global financial crisis. Given that SMEs account for about 60% of value added and 70% of employment in the euro area,... more

Dieter Beselt (Copyright)  Windenergie Windkraft Windrad
Press Release, 20 May 2015

Plant operators must sell their electricity themselves – costs of forecast deviations and site-specific changes in revenue make wind power unnecessarily expensive The 2014 reform of the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, or EEG) mandates that operators of new large... more

ChrisW (Copyright)  Freileitungsmast Mast Masten
Interview, 20 May 2015

The interview with Prof. Karsten Neuhoff, Ph.D. is published in DIW Economic Bulletin 21/2015. It is available for download as pdf document. More issues of DIW Economic Bulletin more

DIW Berlin (Copyright)  DIW Roundup Logo
Debate, 19 May 2015

Individual health is not only determined by genetic factors, but also by negative or positive events during the life course. For example, children exposed to natural disasters or violent conflicts are more likely to have poor health as adults. Positive external factors, such as nutritional... more

Gk (Copyright)  Geld Cash Finanzen
Press Release, 13 May 2015

A tightening of capital requirements for banks that invest in EU government bonds would primarily create a significant additional demand for capital for Greek banks. This is the conclusion of a study conducted by the German Institute for Economic Research (DIW Berlin), which calculated the... more

List of News
by Thilo Grau, Karsten Neuhoff, Matthew Tisdale, in DIW Economic Bulletin

The 2014 reform of the Renewable Energy Sources Act (Erneuerbare-Energien- Gesetz, or EEG) entailed that a mandatory direct marketing of green electricity be introduced. According to this law, operators of larger wind turbines must sell their electricity production on the electricity market. In addition to the wholesale price they receive a floating market premium, which is based on the average market value of all wind power in Germany. The mandatory direct marketing affects both the costs incurred, as well as the revenues earned, by the plant operator. The costs of compensating for forecast deviations in particular, as well as the changes in revenue due to differences in site-specific production profiles, create new risks for investors, and can increase financing costs of project-financed wind turbines. The dimensions of these effects were examined in various scenarios. Depending on the underlying assumptions, mandatory direct marketing may create additional support costs ranging from 3 to 12 percent for new wind turbines. Ensuring favorable financing costs should therefore be an important criterion in the further development of the EEG.

by Dorothea Schäfer, Dominik Meyland, in DIW Economic Bulletin

In the wake of the European debt crisis, it has become clear that government bonds may actually be a risky form of investment. The Basel Committee and the Bundesbank have therefore opened an intense debate as to whether banks investing in EU government bonds should be subject to regulatory capital requirements in the future. Currently, banks do not need equity capital when investing in sovereign bonds. Waiving this exemption privilege would result in an additional Tier 1-capital requirement of 3.34 billion euros for the German banks studied here. This represents just under 1.8 percent of available Tier 1-capital. For French banks, the calculated capital requirement is 3.52 billion euros (a good 1.2 percent), while Swedish banks have a requirement of an additional 80.6 million euros (0.14 percent). Raising these funds is not likely to cause any major problems for banks in these countries. It is an entirely different matter for Greek banks, however. The capital requirement in Greece is relatively high at almost 1.8 billion euros or almost nine percent of existing Tier 1-capital. Despite its modest impact on the leverage on banks’ balance sheets, a regulatory obligation to finance investments in EU government bonds with some equity capital would be very welcome. The ratio of equity to total assets would improve, at least slightly, and the reform would probably loosen up the close link between bank risks and sovereign debt in the longer term. Both would help achieving a more stable financial system within Europe.

List of Publications
Direct to
  • Das Soziooekonomische Panel
  • Graduate Center
  • Vereinigung der Freunde
  • Diw Econ
  • audit berufundfamilie Research Data Centres of the Federal Statistical Office and the statistical offices of the Länder Leibniz Association DIW Berlin is a
    member of the
    Leibniz Association