If banks exclude certain kinds of borrowers, this creates an opportunity for alternative lenders. This is the idea behind a host of new platforms that have emerged since the crisis.In some cases, safe borrowers might be unable to get through the bureaucratic processes at large banks, giving rise to a kind of data arbitrage on behalf of the smaller lender. Internationally determined risk-weights or distant headquarters might override the realities of local markets for credit.New lending platforms, especially of the fintech variety, also claim to have more efficient or innovative data analytic processes in place, allowing them to more accurately price credit. Here’s Moody’s, today, on the topic of new underwriting technologies in general: In recent years, rapid advances in new technologies
FT Alphaville considers the following as important:
This could be interesting, too:
Menzie Chinn writes Stop Stephen Moore
Eric Crampton writes In Medio Stat Virtus
Menzie Chinn writes Glenn Rudebusch on “Climate Change and the Federal Reserve”
Bradford DeLong writes Brad DeLong's Grasping Reality 2019-03-26 00:52:20
If banks exclude certain kinds of borrowers, this creates an opportunity for alternative...