Running dry

The UK has seen an old-style bank run like those of the nineteenth century. German lenders have struggled to prop up failing conduits. Contagion from the US has reached Europe but not in the way anyone expected. Subprime lenders, in particular, have been quick to increase their rates and tighten lending criteria. By Dippy Singh

Victoria Mortgages, just a few months ago, was enjoying a subprime mortgage boom in the UK. But this September the company went into administration, a turn of fortunes that few European lenders were expecting.

Victoria's fate was determined by the capital markets. The current US mortgage crisis sent the global capital markets into a spin this summer, resulting in investors effectively shutting their doors to those that depend on their funding, regardless of how safe the collateral might be.


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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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