Introduction the Bank Lending Framework
In the first part of this three part series on the ‘basics of lending’, Paul provides some context on its importance and discusses the lending strategy and objectives of a typical commercial bank.
Overview
Aggressive lending practices contributed to the 2008 Financial Crisis, largely because credit analysis was not the basis for issuing loans. Nowadays, commercial banks are more risk averse and focus on traditional and modern sources to assess a borrower's credit worthiness before issuing a loan.
Key learning objectives:
Explain how lending practices impacted the 2008 Financial Crisis
Describe the aim of commercial banks in regards to lending
Outline the sources used to assess a potential borrower
Summary
Expert
Paul Taylor
Paul has spent 35 years working in banking, almost exclusively in client facing roles. During that time, he has covered all customer segments from retail to global corporate, and has spent more than half of his career working on the Global Banks coverage team at Lloyds Bank. Paul recently worked in an advisory capacity for a small Fintech bank in the City.
