Credit Risk Management for Traditional Lending 11
Traditional commercial lending is undergoing very radical changes. The new perspective that the traders have brought to the table is driving this change. They see a loan as a somewhat liquid asset whose risk/return contribution to the overall portfolio can be measured. This has huge implications that are starting to be felt across the full spectrum of commercial lending.
THE TRADITIONAL CREDIT PROCESS: COMMERCIAL LOANS
Until the early 1970s, the traditional process for originating commercial credit was quite extensive and exhaustive, a natural outcome of buying assets that will remain on the books for years. Units within the bank, typically organized around industry, sometimes with a geographical ...
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