Multiple NPL models better than single models, research finds
Combinations of models produce better NPL estimates in study of Greek crisis
New research into the forecasting of bad loans has found banks would achieve better results by combining a variety of economic models, rather than relying on a single approach.
The analysis, by Georgios Papadopoulos, an economist at the Democritus University of Thrace in Greece, used portfolio data from three Greek banks to study how effectively models were able to convert a macroeconomic scenario – such as a decline in GDP or rise in unemployment – into a credit risk impact, specifically the
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