Revolvers misfiring?

Thanks to the uncertainty in the capital markets late last year, several corporates tapped committed revolving credit lines set up as backstop facilities. Could a potential surge in drawdowns affect already capital-constrained banks? By Christopher Whittall


Hard as it may be to believe in these turbulent times, cheap credit was easy to come by for much of the past decade. As recently as the first half of 2007, the going remained good for borrowers, with credit spreads locked at historically low levels. And in the ultra-competitive loan business, banks looked to increase market share by extending funding to even the lowest-rated corporates while at the same time relaxing loan covenants - a decision that came back to bite many firms as the credit

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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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