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Impact studies are being emphasized upon by welfarist approach to measure the changes in the living condition of borrower after lending.
Meredith Whitney of the Meredith Whitney Advisory Group believes the major banks, including Bank of America and Citigroup, are going to cut lines of credit in response to the worsening condition of borrower balance sheets and to get ahead of new government regulations that will restrict a bank's ability to unilaterally change credit card rates.
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Indeed, some contrarians believe that today's corporate-bond spreads say more about the shaky health of the financial markets than they do about the condition of corporate borrowers.
Lenders are imposing tougher conditions on borrowers as they find the amount of money they have available to lend restricted by the ongoing credit crunch.
It also said that "in late October of this year, the financial condition of a single large borrower deteriorated significantly" and noted that the loan could be "classified as nonperforming" in the fourth quarter.
The bank also said that the number of mortgages more than 60 days late declined in the second quarter, a sign of healthier conditions for borrowers.
In other words, what we'd like to know is what level of lending we'd expect to see, given certain economic conditions and a certain level of borrower creditworthiness.
Even if the condition of the economy generally improves, borrowers will face the double problem of foreclosure and then taxes, unless home prices begin to climb rapidly.
In June, the Financial Services Agency disciplined UFJ for trying to conceal the extent of its bad loan problem from inspectors by doctoring or concealing documents describing the condition of some of its largest troubled borrowers.
You can lend anything to this type of borrower.
Continuity condition: When the borrower defaults, the value of the pledged assets is equal to the value of the loan.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com