Credit risk scoring has gone a long way since Fair Isaac introduced the first commercial scorecard to assist banks in making their credit lending decisions over 50 years ago. It now becomes the cornerstone in modern credit risk management thanks to the advancement in computing technologies and availability of affordable computing power. Credit scoring is no longer only applied in assessing lend...

credit decisions are extremely vital for any type of financial institution because it can stimulate huge financial losses generated from defaulters. credit scoring models are decision support systems that take a set of predictor variables as input and provide a score as output and creditors use these models to justify who will get credit and who will not. many different credit scoring models ha...

J ournalists, businessmen, politicians, and regulators are paying increasing attention to the subject of discrimination in lending, with particular emphasis on mortgage lending. It sometimes seems as though the main issues in antidiscrimination efforts have shifted from education and labor markets to the credit markets. Two different federal laws deal with discrimination in lending: the Fair Ho...

This paper examines whether fair value accounting increases the pro-cyclicality of banks’ lending behavior. Exploiting cross-sectional variation in individual banks’ exposure to fair value accounting, I find that fair value accounting does not exacerbate the pro-cyclicality of bank lending over the past two business cycles during 1995-2010. This result holds despite the fact that every one doll...

a r t i c l e i n f o Paying particular attention to the degree of banking market concentration in developing countries, this paper examines the effect of credit information sharing on bank lending. Using bank-level data from African countries over the period 2004 to 2009 and a dynamic two-step system generalised method of moments (GMM) estimation , it is found that credit information sharing i...

We study the reaction of commercial banks to external macroeconomic shocks using panel data from over 120 banks in Argentina for the period 1996-1999. We show that all banks reduce lending when systemic risk increases and that this reaction is driven by credit supply decisions by banks, beyond and above the impact of reduced credit demand or increased regulatory pressure. However, the underlyin...

This paper focuses on potential interaction between the mortgage underwriting and pricing decisions for fair lending analysis of mortgage pricing. We argue that the loan approval or denial decision determines the loan origination population and therefore the underwriting policies might affect the fair lending assessment of the subsequent pricing decisions. The paper also finds that sample selec...

Lenders have increasingly responded to regulatory and public pressures to provide credit to lowerincome and minority communities by entering into CRA agreements, which typically involve pledges to extend a certain volume of lending to targeted groups and communities. This paper considers the broader impact of these CRA agreements by examining whether they are associated with changes in lending ...

An increasingly common method for lending institutions to demonstrate their commitment to and compliance with the Community Reinvestment Act of 1977 (CRA) and fair lending laws has been to enter into agreements with community groups and other entities to help ensure the flow of credit throughout their service area. Table 1 shows that the volume of loan pledges associated with these agreements, ...

This paper studies bank loans over the business cycles in Iran to determine the role of Iranian banks in stabilizing credit. By estimating the long-run relations using dynamic OLS and fully modified OLS estimators, the findings show that real bank lending is positively related to real GDP in the long-run providing evidences of the pro-cyclicality of bank lending in Iran. Hence, Iranian banking ...