Interest rate difference transactions are basically constructed in a clear fashion: the investor takes up a loan and invests the loaned money in an investment which guarantees interest payments which are higher than the payments which he owes to the bank for the loan. The difference between the interest he receives and the interest he owes is his profit.

These transactions only become really profitable – but at the same time highly hazardous – if loan and investment are concluded in different currencies or in countries with different levels of interest rates. Basically the investor then makes a bet on the development of the interest rate levels in the respective countries or on the development of the exchange rate of the currencies involved. How quickly seemingly secure currencies can depreciate in value has been shown at the latest count by the economic development since the spring of 2010.

In these cases we help our clients to cut their losses.  If you were not adequately informed about the speculative nature and the particular risks of the recommended investment, a negative difference of interest rates can be asserted as a claim for damages.