FIN 3636 Chapter : Chapter 16 Notes
Document Summary
Bankers and other lenders are expected to support their local communities with an adequate supply of credit for all legitimate business and consumer financial needs. To price that credit reasonably in line with competitively determined market interest rates. How well a lender performs in fulfilling the lending function has a great deal to do with the economic health of its region, because loans support the growth of new business and jobs in a new territory. When a lender gets into serious financial trouble, its problem usually springs from loans that have become uncollectible due to mismanagement, illegal manipulation, misguided policies, or an unexpected economic downturn. Experience and expertise of management; loan policies. Expected yield of each type of loan. * yield does not mean interest rate here. * it means the profit that you will keep. Banks are expected to maintain credit risk-management systems that produce accurate and timely risk ratings.
