Search results for "Credit history"
showing 9 items of 9 documents
Determinants of interest margins in Spanish credit institutions before and after the 2008 financial crash
2017
As interest margins of credit institutions affect economic performance of countries, finding out which are the main determinants of their evolution is a research task of great interest at current times. This is the purpose of the present paper as regards to the Spanish case over the period 2004-2012. Based on the econometric contributions by Ho and Saunders (1981) and some of its extensions, the authors develop a model that includes as explanatory variables the factors usually examined in the literature and other singular variables that might be relevant. Particularly, the rate of leverage, the quality of their assets measured according to their risk, and the profit obtained from the sellin…
CREDIT RISK MANAGEMENT IN COMMERCIAL BANKS
2016
The article proposes a model of credit risk assessment on the basis of factor analysis of retail clients / borrowers in order to ensure predictive control of the level of risk posed by potential clients in commercial banks engaged in consumer lending. The aim of the study is to determine the level of risk represented by different groups (classes) of retail clients (borrowers) in order to reduce and prevent credit risk in the future as well as to improve the management of banking risks. The main results of the study are the creation of a model of borrowers internal credit ratings and the development of the methods of improving credit risk management in commercial banks.
Credit-Based Insurance Scores: some Observations in the Light of the European General Data Protection Regulation
2020
Despite the differences between credit risk and insurance risk, in many countries large insurance companies include credit history amongst the information to be taken into account when assigning consumers to risk pools and deciding whether or not to offer them an auto or homeowner insurance policy, or to determine the premium that they should pay. In this study, I will try to establish some conclusions concerning the requirements and limits that the use of credit history data by insurers in the European Union should be subject to. In order to do this, I shall focus my attention primarily on Regulation (EU) 2016/679. This regulation, that came into force on 24 May 2018, not only forms the ba…
Is There a Credit Risk Anomaly in FX Markets?
2015
This paper explores whether a link between sovereign credit ratings and currency returns exists. Perhaps contrary to expectations, it finds that currencies of countries with higher credit risk tend to generate lower returns than those with a lower credit risk. The credit risk spread cannot be explained by standard risk factors.
The Separating Role of Collateral Requirements in Credit Markets with Asymmetric Information
2001
In this paper we test Bester's (1985, 1987) prediction about the separating role of contracts that involve both interest rates and collateral requirements in credit markets. To test this prediction we use data from natural credit markets and controlled experiments. Using a sample of credits to small and medium size firms in Valencia, Spain, we relate two different types of contracts with the ex post risk type of the borrower and other relevant variables. We then design two incentive compatible contracts and analyze decisions under two different experimental treatments, one with moral hazard. Our empirical results confirm that borrowers of ex post lower risk choose contracts with higher coll…
Risk Management Era in European Credit Institutions: Predictable Mutation in XXI Century
2014
Abstract In the market economy, globalization, liberalization and diversification of financial markets, fierce competition between the credit institutions and many of the products and services offered by them are the main factors that have exposed the banking sector to new risks, while leading to multiple challenges. For these reasons it is becoming increasingly important both permanent innovation and risk management techniques tools as well as banking performance. Only a pertinent analysis and a very good knowledge of the new tendencies in banking financial risk management can provide credit institutions in Romania efficient options on their use of management, while obtaining a higher prof…
Credit reporting e intermediazione creditizia: scelte di “make or buy” tra relationship e transaction banking.
2016
Il presente lavoro prende in esame, con una prospettiva di analisi economico-aziendale, il ruolo del mercato del credit reporting nell’esercizio della funzione creditizia delle banche, nonche il vario articolarsi delle scelte di make-or-buy informativo nella catena del valore dell’intermediazione creditizia, tra approcci di relazione di clientela di tipo relationship banking e transaction banking. In particolare, il lavoro e volto a sistematizzare le teorie ed a comprendere le determinanti del ricorso delle banche al mercato dell’informazione creditizia. Il paper e strutturato nel modo seguente. La sezione 2 introduce il tema dell’economia dell’informazione nel mercato creditizio. La sezion…
A simple model of income, aggregate demand and the process of credit creation by private banks
2013
This paper presents a small macroeconomic model describing the main mechanisms of the process of creation by the private banking system. The model is composed of a core unit-where the dynamics of income, credit and aggregate demand are determined-and a set of sectoral accounts that ensure its stock-flow consistency. In order to grasp the role of credit and banks on the functioning of the economic system we make an explicit distinction between planned and realized variables, thanks to which, while maintaining the ex-post accounting consistency, we are able to introduce an ex-ante wedge between current aggregate income and planned expenditure. Private banks are the only economic agents capabl…
The Impact of Credit on Economic Growth in the Global Crisis Context
2013
Abstract Is there a connection between credit and economic growth in the present economic context? Credit was one of the factors which triggered the global crisis, thus, in the present paper we attempt to show whether there is a connection between credit and economic growth, the economy being unable to develop in the absence of credit. With the aid of a statistic software we have tried to determine the supposed existence of a connection between the GDP, credits offered to public administration and credits offered to households. The results of the analysis show that credits offered to households contribute to a greater extent to the formation of the GDP than credits offered to public adminis…