the lombard loan.

A Lombard Loan1 is a fixed loan or agreed overdraft granted against a pledge of liquid assets such as equities, bonds or investment funds, up to a certain percentage of their value.

the history of lombard loans

The roots of the term “Lombard” date back to the Middle Ages and refers
to the type of banking offered by Italian merchants from the Lombardy region.

Following the economic expansion of the West in the 12th century, these merchants were the first people to cater to consumer loan needs, marking the inception of the bank-lending profession.

 

with a lombard loan, assets remain invested

 

The borrower retains all the related advantages of the assets (e.g. voting rights and dividends for equity holdings).

So the borrower does not need to reduce their capital – or their potential returns – to obtain cash.


the borrower’s capital is at risk with a lombard loan

 

If the securities held as collateral lose value – for instance, because of market volatility or exchange rate risk – the borrower must provide more collateral or accept the possibility of a sale of their assets to reduce the amount of the loan.


bear in mind, borrowing money also costs money

 

A loan is an obligation to repay a fixed amount of money at a fixed future date. Its cost will depend on the amount borrowed, the quality of the collateral and the length of time for which it is required. Early redemption may also incur costs. 

The Lombard Loan has no connection to our bank, despite sharing the same name
 

 

Period CHF EUR GBP JPY USD
1 month0.00000.00000.86000.29802.5795
2 months0.00000.00000.90060.29802.7125
3 months0.00000.00000.96100.28852.8418
4 months0.00000.02010.98400.31012.9207
5 months0.00000.03011.04520.32112.9706
6 months0.00000.04021.08120.33223.0702
7 months0.00000.03181.13420.34433.1502
8 months0.00000.04511.15250.35633.1801
9 months0.00000.07041.17070.36843.2101
10 months0.00000.07551.18880.38153.2907
11 months0.00000.08751.20850.39353.3214
12 months0.00000.09461.22390.41563.3520
Date: 20/11/2018