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The subprime-mortgage crisis was driven in part by a compensation structure that rewarded the quantity of loan transactions rather than the quality.
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At a press conference in August, Sir Mervyn gave a clear account of the actual quantity of loans being dispatched.
The next president, Jacques de Larosière, swiftly brought in an austerity drive at the bank, while seeing that large volumes of money were lent to Central and Eastern Europe, Russia and the rest of the ex-Soviet Union.The EBRD admits that the sheer quantity of loans may have impaired their quality, an imbalance it now wants to redress.
The borrowers who apply to FIs for a loan but obtain either lower amount of loan than they desire or rejected are quantity rationed borrowers.
The amount of loan also varies from around USD25 for a loan with daily interest payment to USD400 for loans with weekly and monthly interest payments.
A Justice Department press release noted that, "To maximize its loan volume (and profits), Wells Fargo elected to hire temporary staff to churn out and approve an ever-increasing quantity of FHA loans... "At the same time, Wells Fargo's management applied pressure on its underwriters to approve more and more FHA loans.
The third result would be to improve the balance of our banking structure, making for a larger proportion of sound commercial loans (especially when business again expands) and permitting the repayment of a certain quantity of frozen security loans.
But executives from the credit agencies said that while the agencies may have miscalculated the quantity of low-quality loans, their mistakes were unintentional and not the product of any conflicts of interest.
Banks are wobbly, burdened with huge quantities of bad loans.
Many big banks were burdened with huge quantities of bad loans, and bank failures climbed steeply.
When the bubble economy eventually popped, the banks were left with vast quantities of bad loans and almost worthless collateral.
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