The domino effect

The financial crisis is starting to take its toll on the wider economy, raising fears among corporate derivatives users that more stringent terms will be attached by dealers to their trading activities. By the same token, the collapse of Lehman Brothers has corporates revisiting their collateral arrangements with dealers. Rob Davies reports


September and October saw an unprecedented, and almost unthinkable, number of government and central bank interventions around the globe, in a last-ditch effort to shore up the balance sheets of financial institutions that have been decimated during the credit crisis. From the $700 billion government bail-out of US banks to the equivalent measures taken by European authorities, the actions are aimed at restoring confidence in financial institutions and getting banks to lend again: to each other

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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