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Talking Credit

Jun 01

2009

CREDIT CULTURE REBOOT, PART IV: WHAT'S GONE WRONG IN LENDING PRACTICES?

Posted by Ed O'Leary in Talking Credit

Over the last generation or so, it has become almost an article of faith that a strong loan policy is the ultimate defense against poor loan quality. And banks and regulators take loan policies quite seriously. So where did all these bad loans come from?

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May 27

2009

CREDIT CULTURE REBOOT, PART III: IS THERE A â€œCORE CURRICULUMâ€ FOR LENDERS?

Posted by Ed O'Leary in Talking Credit

Should bankers try to define the sorts of analytical techniques that should be a standard part of any lending officer's skill set?

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May 21

2009

CREDIT CULTURE REBOOT, PART II: FIVE PLACES TO IMPROVE LENDING TRAINING

Posted by Ed O'Leary in Talking Credit

Have your younger lenders been learning from the wrong people?

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May 13

2009

CREDIT CULTURE REBOOT, PART I: THE UNTRAINED LENDERâ€”AND WHAT TO DO ABOUT IT

Posted by Ed O'Leary in Talking Credit

A Stonier Graduate School of Banking thesis on credit training, written in the 1960s, opens with a thought that is as relevant today as it has ever been:

“An untrained lender is an insecure and unhappy person. At best, he or she is a walking tribute to bad public relations.”

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Apr 15

2009

THOUGHTS ON THE CHALLENGE OF MANAGING THE CAPITAL ACCOUNT

Posted by Ed O'Leary in Talking Credit

Bankers are trained to be conservative. Ask virtually any borrower. And lenders normally pride themselves on being conservative and careful with their depositors’ money. But being conservative may not simply describe the way we lend money. A principal concern of the industry today is solvency risk—that the industry has sufficient capital. And this leads to an important train of thought for community bankers.

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Apr 08

2009

CAUGHT IN A VISE OF MIXED MESSAGES

Posted by Ed O'Leary in Talking Credit

As bankers we’ve had our share of conflicting messages the last several months. We’re getting political pressure to lend and pressure from examiners to be more conservative in the day-to-day application of our lending policies.

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Mar 19

2009

WHATâ€™S CHANGED IN COMMUNITY BANK LENDING TODAY, AND HOW IT COULD CHANGE AGAIN AS CONGRESS TINKERS

Posted by Ed O'Leary in Talking Credit

Credits that could pass muster at most community banks 18 to 24 months ago cannot pass muster today. This is because community bankers have become very cautious due to the precipitous decline in business activity, while examiners have taken a strong but probably deserved stand on credit quality during recent community bank safety and soundness examinations. Could community banks have anticipated today’s malaise? And what does today’s trouble bode for future lending practices?

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Feb 22

2009

TURNING THE TABLES ON THE MOST IMPORTANT "C" IN THE FIVE C'S OF CREDITâ€”AND WHY IT'S MORE IMPORTANT

Posted by Ed O'Leary in Talking Credit

The Five Cs of Credit have been a durable way of teaching credit principles to bankers for many years. Bankers are taught that the first and most important C is Character, the overarching qualification for an applicant to receive credit. Today there are implications concerning Character for both sides of the loan desk.

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Feb 10

2009

Some Words of Advice To Young Lenders Trying To Get It Rightï¿½And To Those Who Can Help Them Do So

Posted by Ed O'Leary in Talking Credit

The credit quality results of the last few years are particularly discouraging to those who are charged with the responsibilities of maintaining their bank’s portfolios relatively free of problems. How will younger lenders ever learn the right way to run a portfolio?

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Feb 09

2009