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    The Importance Of Third-Party Data In Effective Underwriting

    November 2022

    The Importance Of Third-Party Data In Effective Underwriting

    As we move from an era of central banks injecting liquidity into the financial system to one of monetary tightening, the time of “easy money” is quickly giving way to global inflationary pressures and rapidly rising interest rates. This is putting pressure on bank underwriters, who are pivoting from a long period where cheap funding was plentiful, to one where risk-appropriate pricing is essential to funding new deals. Underwriters have to find ways to compete in this volatile environment, and they have to address the relationship between rising interest rates and increasing risks of lending and refinancing, especially with more highly leveraged companies. This is requiring underwriters to be more diligent with their risk assessment when considering which firms and financial institutions to extend loans to, and under what terms.

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