The biggest new entrants, the banks, have come in mainly by buying stakes in consumer-lending companies, which have an expertise in assessing loan risk that far outstrips their own.
But selling non-core assets and reducing loan loss risk and the reserves for potential losses was ostensibly part of their federal bailout deal.
Others target lenders by requiring better loan-risk disclosure to borrowers.
Overexposure to construction and development loans: The first guideline states that if loans for construction, land development and other land are 100% or more of total risk capital, the institution is considered to have loan concentrations above prudent risk levels, and should have heightened risk management practices.
And since the assets you've pledge would be worth considerably more than the loan, that risk of the so-called counterparty collapsing isn't worth taking.
Today your local bank might be interested in lending to a start-up business but tomorrow it will be less inclined because carrying that kind of loan increases its risk.
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Additionally, she points to RIA accreditation and an extensive background check on the 50 certified financial planners who offer advice on everything from student loan debt to risk tolerance analysis and portfolio recommendations.
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Mr. CORBETT: We found that when you have African-Americans with - or Latino borrowers with a same credit scores, same house, same neighborhood, same income then they are still likely to put be into a high risk loan and 30 percent more likely to receive a high rate loan then white borrowers.
The markets will understand that a loan to a systemically significant institution will carry less risk than a loan to an institution that does not have this status.
Santander has staffed its Latin American operations with its own credit-risk specialists, who veto any loan that offers less than a risk-adjusted return of 20% a year.
Each loan has its own risk rating, term (either 36 or 60 months) and rate of return.
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Even with the backing of an SBA guarantee, banks do not want to fund any loan that has unwarranted risk.
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It also says the three ignored the warnings of a company risk officer that the underwriting practices and marketing strategy of matching competitors' offers to subprime and option loan borrowers was substantially increasing risk in the portfolios.
Currently, banks receive one-quarter percent interest for making a risk-free loan to the Fed.
The risk of the loan is spread out over lots of investors lending small amounts.
The House's draft bill calls for a one-year, risk-sharing loan programme that could be extended for two more years.
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Lenders are required to disclose credit scores to consumers if they are used to assess the risk of a loan applicant.
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At least that is the way it works when an ordinary citizen judged to be a bad credit risk seeks a loan.
Risk aversion also adds to interest rate costs on short term bank loans, and with Russia considered a risk investment, loan costs inevitably rise.
James Adams is a Senior Analyst at Sageworks, a leading provider of credit risk management, loan loss reserve and stress testing software to financial institutions.
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This is a form of heightened scrutiny, though informal and less severe than some other options, and looks at a bank's capital and risk management, loan quality and liquidity.
Prepayment risk for auto loan ABS is much lower when compared to home equity loan ABS or MBS. Prepayment only happens when the borrower has extra funds to pay the loan off.
But protesters argue the loan is putting a masterpiece at risk for the sake of a commercial event.
They fail to grasp the potential benefits of a long-term fixed-rate loan because they do not understand risk properly.
Even where a loan is related to development, risk can be managed with guarantees, additional capital and cash flow projections based on reasonable assumptions.
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Therefore at the end of the term, providing the repayments have been made every month, you know the loan will be paid off without risk.
The three major credit reporting agencies, Equifax, Trans-Union and Experian, collect similar information to help businesses answer a basic question: Is the loan or credit applicant a good risk?
But even if a liquid market in such securities could be created, it would still rely on banks with experienced loan officers to assess the credit risk of small firms.
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The three major credit reporting agencies, Equifax (nyse: EFX - news - people ), Trans-Union and Experian, collect similar information to help businesses answer a basic question: Is the loan or credit applicant a good risk?
First, under the Basel system that allows big banks with "advance" status to set their own evaluations of the riskiness of different categories of loan - the so-called risk weights - there is not enough consistency in how much capital different banks hold to cover similar risks.
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