The Economist: Ian Shipley Discusses The Credit Crisis
Jun 11, 2020
Ian Shipley, Finance and Risk Partner, spoke to The Economist on banks’ loan-loss provisions as a way to gauge how the coronavirus will impact the economy.
The Economist explained that provisions for credit losses are now lower than initially outlined. The reason being that to predict losses, most banks enter economic forecasts into models. The prospects for 2020 are hardly rosy, but it seems at least that economies are no longer in free fall.
Relief may be premature, though, as central-bank and government action has bought borrowers time. Ian Shipley highlighted that this may prompt banks to refine their standard loss-prediction models by using more alternative data.