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Categories : Communications , Ethics , Leadership , decision-making Echo Garrett is the National Practice Manager for KPMGs Financial CreditRisk practice and a Co-Founder of "Her Voice", a National Womens Organization that brings women together for local support and charitable opportunities.
Most of these “affordable” loans were in fact sub-prime, “for persons with blemished or limited credit histories,” and “carry a higher rate of interest than prime loans to compensate for increased creditrisk,” according to HUD.gov. Both crises proved it’s not.
With larger volumes of data being used to analyze everything from the genome to traffic patterns and lunch choices, it is natural to ask whether big data can crack the code on small business creditrisk. After all, isn’t the customer’s voice relevant if you are going to finance a plumber or restaurant?
The rest of the reading list: " CreditRisk and the Macroeconomy: Evidence from an Estimated DSGE Model ". Stock Market Conditions and Monetary Policy in a DSGE Model for the U.S. ". " The Bank of England Quarterly Model ".
With fairly few signals in their models, the FICO score doesn't have the ability to distinguish between creditrisk in a generally high risk group. For example, thousands of signals can be used to analyze an individual's creditrisk. The way to address this is to add more signals.
Greenspan again: “I think the evidence probably is conclusive, that a necessary and sufficient condition for a bubble is a prolonged period of economic stability, stable prices, and therefore low risk spreads, creditrisk spreads.”. Economy Finance Managing uncertainty' But I think the man is on to something.
With larger volumes of data being used to analyze everything from the genome to traffic patterns and lunch choices, it is natural to ask whether big data can crack the code on small business creditrisk. After all, isn’t the customer’s voice relevant if you are going to finance a plumber or restaurant?
I tried to get Greenspan to talk me for my November HBR article on economics and finance since the crisis , but he said he’d promised his publisher to keep mum until the book was out, which was too late for my purposes. It was the form in which the asset was financed. One is finance and the other is non-finance.
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