Joint efforts pay off

Central bankers were forced by last year's global contagion into acting in concert for once. Natasha de Teran reports on the market's reaction to this development

Last summer, what began as a localised private sector hiccup rapidly escalated to become a global public sector problem, leaving central bank officials to inject liquidity into drought-filled money markets. Along with contending with the root cause of the problem, central bankers face two pressing questions: how they should react to such situations in future and which, if any, of their long-standing practices they need to change.

No longer isolated to a corner of the US subprime mortgage market

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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