Bargain basement in the Baltic states

jan-kvarnstrom

Nordic banks are drawing on the lessons of Sweden’s property crisis in the early 1990s as an increasing proportion of their Baltic mortgage loans slide into trouble. With the local property markets comatose, selling repossessed homes would leave banks recovering a tiny fraction of their loans – one Riga-based banker indignantly says he was recently offered 5% of the original value to sell one portfolio to a local group of distressed investors. He turned the proposal down flat, but the

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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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