Commercial Lending Review articles from November 2003

Commercial Lending Review archives from November 2003

Behavioral bias: the hidden risk in risk management.
November 1, 2003... Major strides were made in quantitative risk management during the 1990s. Yet, despite these advances, financial institutions suffered large credit losses following the collapse of the telecom, media, technology, and energy (TMT/E) boom. How...

Employee compensation: stock options versus restricted stock.
November 1, 2003... The granting of stock options as compensation is beginning to lose its appeal. For many years, firms have awarded stock options to their employees as a way of aligning the goals of management with shareholders. Stock options are seen as an...

An overview of portfolio credit-risk models.
November 1, 2003... Increasing competitiveness and recently decreasing credit quality in the banking industry have led to a critical need for more accurate credit-risk assessment. Market-risk models, including Value at Risk, have been actively developed and...

Distressed-debt collateralized obligations: a new tool for portfolio management.
November 1, 2003... Collateralized debt obligations (CDOs), the primary underlying assets of which are distressed loans and similar debt obligations, allow portfolio investors a greater opportunity to participate in distressed-debt markets and will bring...

The use of subordinated debt financing for business development projects.
November 1, 2003... Increasingly, businesses that require financing for their start-up and expansion needs are looking to nontraditional sources of debt to meet those needs. By non-traditional sources of debt, we mean the vast array of financing that is available...

The role of corporate life cycle in the prediction of corporate financial distress.(Credit Analysis)
November 1, 2003... Academic research has long shown that accounting information can predict the likelihood of failure at rates significantly greater than random chance can explain. Most of these studies, however, have used statistical models constructed without...

AcSEC proposes new guidance on creditors' recognition and measurement of the allowance for credit losses.(Accounting)
November 1, 2003... Recently, the Accounting Standards Executive Committee (AcSEC) of the American Institute of Certified Public Accountants (AICPA) issued an exposure draft of a proposed Statement of Position (SOP), "Allowance for Credit Losses." The proposed SOP...

Auditing fair value measurements and disclosures.(Auditing)
November 1, 2003... The Auditing Standards Board (ASB) recently issued Statement on Auditing Standard (SAS) 101 to provide guidance for auditing fair value measurements and disclosures contained in financial statements. SAS 101 addresses audit considerations...

Overview of Sarbanes-Oxley compliance.(Financial Reporting)
November 1, 2003... CFOs, controllers, directors, audit committees, and their legal counsel have been working to comply with the Sarbanes-Oxley Act of 2002, the most sweeping corporate reforms since the Securities Exchange Act of 1934. In the banking industry,...