Marketplace lending has fundamentally changed the relationship between borrowers and lenders in financial markets. As with many other financial products that have emerged in recent years, internet-based investors may be inexperienced in marketplace lending, highlighting the importance of...

We analyse the impact of soft information on US mortgages for default prediction and provide a new measure for lender soft information that is based on the interest rates offered to borrowers and incremental to public hard information. Hard and soft information provide for a variation in annual...

This study investigates the need for credit supervision as conducted by on-site banking supervisors. It builds on a real bank on-site credit examination to compare the performance of a hypothetical self-supervision approach, in which banks themselves assess their loan portfolios without external...

The interest collected by the main borrowers is collected to pay back the principal borrowed from the depositary bank. In financial risk management, credit risk assessment is becoming a significant sector. For the credit risk assessment of client data sets, many credit risk analysis methods are...

When race is not directly observed, regulators and analysts commonly predict it using algorithms based on last name and address. In small business lending--where regulators assess fair lending law compliance using the Bayesian Improved Surname Geocoding (BISG) algorithm--we document large...

Proxies for race are commonly used in settings where race cannot be observed directly. In the context of small business lending, we examine the standard race prediction algorithm (BISG), which regulators use to assess compliance with fair lending laws. The algorithm relies on an individual’s...

Roll rates and net flow rates can be seen as the evolution of ageing of accounts receivable and Markov chains. They are accepted methodologies to model the behavior of non-performing consumer loans by buckets and to predict losses, but we find that quite often they are wrongly used as...

During the last years the lending business has come under considerable competitive pressure and bank managers often express concern regarding its profitability vis-a-vis other activities. This paper tries to empirically identify factors that are able to explain the financial performance of bank...

We investigate two questions: (1) Do bank lending decisions to small and medium-sized firms provide information about these firms' future financial performance? (2) Does this predictability vary across different stages of the credit cycle? Based on a unique, detailed data set of all Norwegian...

We investigate two questions: (1) Do bank lending decisions to small and medium-sized firms provide information about these fi rms' future fi nancial performance? (2) Does this predictability vary across different stages of the credit cycle? Based on a unique, detailed data set of all Norwegian...