CREDIT RISK, COMPETITION AND CONSUMER BANKS

A recent Bank of England working paper highlights the link between banking market competition and financial system stability. Consistent with earlier work, it highlights that as competition increases, the banking system overall responds typically by moving to higher risk lending.  However, in addition, it describes how individual banks tend to converge with the most-risky becoming more secure as competition increases.

4MOST LAUNCHES FIRST-OF-ITS-KIND BESPOKE ECONOMICS SUBSCRIPTION SERVICE

 Providing insight beyond the macroeconomic headlines. 4most, the leading risk analytics consultancy, has successfully launched a bespoke economics subscription service. The international service brings rigorous economic analysis to the challenges faced by the financial services sector.   

4MOST HIRE FORMER WESTON FAMILY UK CHIEF FINANCIAL OFFICER ALVIN NG

21 September 2018, London: 4most, the global credit risk consultancy, has appointed Alvin Ng as their new Chief Financial Officer (CFO). Alvin joins from the UK arm of the Weston family’s private office, Galewest Investments Ltd, where his role spanned strategic tax planning and global private assets management. At 4most, he will be responsible for directing and managing all aspects of the finance function and will be a key component in 4most’s leadership team.

RegRadar: 4most bring you the latest news from the credit risk industry

Welcome to the first edition of RegRadar. With publication of Basel III reforms in December 2017, the ongoing EBA RWA harmonisation programme and both the BoE & the ECB consulting on the Definition of Default for credit risk, forward planning and timely implementation is key to understanding how reforms will impact capital and compliance costs of current and future business plans.

IFRS 9 Impairment Models - A regulatory cost or a business opportunity?

The financial services industry has recently undergone a major change due to the introduction of IFRS 9 impairment requirements. This has come generally at increased costs due to either the redirection of internal resource or engagement of third parties to develop compliant models.

4most Creates Share Ownership Trust

4most, the leading risk analytics consultancy, today announces that it has sold majority ownership to an EOT (Employee Ownership Trust). Co-founders Sisson and Somers, together with early investors Beechbrook Capital have sold 55% of the issued share capital to the Trust which will ultimately own the company for the benefit of staff. Sisson and Somers will remain on the board and continue to manage and run 4most Group.

Calculation of IFRS9 Expected Credit Losses with Discounted Cash Flows

IFRS9 Expected Credit Losses (ECL) are commonly calculated as the sum of the marginal future expected losses in each period following the reporting dateusing PD, LGD and EAD components. ECL can also be calculated directly from expected future cash flows. This could be an attractive option for many short-term lenders, especially for those that cannot leverage existing PD, LGD and EAD models, as it requires developing a single cash flow model.

Financial Regulation: 10 years from the crash, how are things different?

This March marks 10 years since the fire sale of Bear Stearns in 2008, a significant moment in the global financial crisis. This moment offers us an appropriate time to reflect and assess how the banking industry has changed in that time and learned from the mistakes of the past – and to consider what the future holds for the sector.

4most comments on Bank of England’s stress test results

On 28th November, the Bank of England published the results from its 2017 stress tests, which provided an assessment of the stability of UK’s banking system.

The headlines show that the major UK banks have all passed the stress tests and are deemed strong enough to keep lending in a scenario more severe than that of the 2008 global financial crisis, which is good news for the sector.

Has the expansion of car finance overstretched borrowers?

Over the past decade, there has been a significant shift in patterns of consumer behaviour in relation to purchasing of new cars. UK private car registrations were 39% higher in 2016 than they were in 2011, a trend which has in part been driven by the expansion of the Personal Contract Purchase (PCP) deals. Some 82% of private new car purchases was financed in this way in 2016. PCPs contribution to the rise in unsecured borrowing is firmly on the radar of both the Bank of England (BoE) and Financial Conduct Authority (FCA).