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We study systemic risk in a supply chain network where firms are connected through purchase orders. Firms can be hit by cost or demand shocks, possibly leading to defaults. These shocks propagate through the supply chain network via input-output linkages between buyers and suppliers. Firms endogenously take contingency plans to mitigate the impact generated from disruptions. They reroute undelivered orders to alternative buyers and switch excess demand to different suppliers. We show that, as long as firms have large initial equity buffers, network fragility is low if both buyer and supplier diversification is low. We argue that horizontal mergers may lead to a more fragile network if firms have small initial equity buffers. We find that a single sourcing strategy is beneficial for a firm only if the default probability of the firm's supplier is low. Otherwise, a multiple sourcing strategy is ex-post more cost effective for a firm.

We examined the effectiveness of two different schemes for providing financial incentives to promote physical activity. We collaborated with a local government in Japan to conduct a field experiment with 498 residents randomly assigned to participate in one of three groups: an “opt-in” group (needed to apply to receive the incentive based on their daily steps), an “opt-out” group (received the incentive by default, but could request not to receive it), and a control group (no incentive). In the opt-in group, 31.1% of the participants applied to receive the incentive, while 100% of those in the opt-out group retained the default option and received it, indicating that their take-up rates depended heavily on the default settings. Our estimation results suggest that providing financial incentives in the opt-in scheme can be effective and efficient. The opt-in group, overall, showed a statistically significant increase of approximately 710 steps per day during the first half of the treatment period, and the number of steps was estimated to increase by 2,280 among the 31.1% of participants who opted-in to receive the incentive. The opt-out scheme did not show any significant increase in their number of daily steps.

Appendix available at https://ssrn.com/abstract=3324720. I examine the impact of the opioid epidemic on subprime auto lending. Using a difference-in-differences framework, I find that county-level increases in opioid abuse cause an increase in loan defaults. Moreover, I find that traditional credit scoring attributes (e.g., FICO score) fail to predict loan performance deterioration associated with opioid addiction. The resulting higher default rates and weaker predictive performance of traditional credit measures generate a negative externality for borrowers in opioid-afflicted areas, as evidenced by 4.4% higher loan costs for subprime borrowers.

Novation is regulated under articles 133 of the Turkish Code of Obligations. Nonetheless, as a rule, if a promissory note is issued for a debt arising from the basic debt relationship, the basic debt relationship is not considered to be renewed. In this case the basic debt relationship does not terminat and the creditor has competing requests. Therefore, if the credit arising from the promissory note cannot be obtained for any reason, the creditor may demand his/her credit based on the underlying basic debt relationship. The General Assembly of Civil Chambers on the Unification of Judgements of the Court of Cassation has a decision dated 25.12.2019, numbered E. 2019/1, K. 2019/8. At that dijudication, the maturity date in a time promissory note can not be considered in the context of the default in actions or execution proceedings based on the underlying basic debt relationship. The legal arguments established in this decision are considerably controversial. For example, the connection between the relationship arising from the issuance of the promissory note and the basic debt relationship is not considered enough in the decision. Besides the concept of procedural request was ignored in the decision. Procedural request is the demand which is directed to the court, which is a definite determination of a legal conclusion, that is the provision of a certain legal protection. Where the debt is due, the obligor falls in default by the notification of the obligee. But the concepts of maturity and default are used incorrectly. Because it is unclear whether the promissory note has been presented for payment, judgment is not adequately clear and needs clarification. In this study, various evaluations were made by approaching the legal issue in the decision from the points of view of civil procedure law, civil law and commercial law. In addition, various evaluations were made regarding the institutions and concepts discussed in the decision., Yenileme, Türk Borçlar Kanunu'nun 133'üncü maddesinde düzenlenmiştir. Buna göre, temel ilişkiden kaynaklanan bir borç için bono düzenlenmesi, kural olarak, borcun yenilenmesi olarak kabul edilmez. Bu durumda temel borç ilişkisi sona ermez ve alacaklı yarışan taleplere sahip olur. Bu sebeple bonodan kaynaklanan alacağın herhangi bir nedenle elde edilememesi halinde alacaklı temel borç ilişkisine dayalı olarak talepte bulunabilmektedir. Yargıtay İçtihadı Birleştirme Hukuk Genel Kurulu, 25.12.2019 tarih E. 2019/1, K. 2019/8 sayılı kararıyla zamanaşımına uğramış bonodaki vadenin temel ilişkiye dayalı olarak başlatılacak takip veya açılacak davada temerrüde esas alınamayacağına karar vermiştir. Bu karara dayanak yapılan hukuki argümanlar oldukça tartışmalıdır. Örneğin, kararda temel borç ilişkisi ile bono düzenlenmesiyle ortaya çıkan ilişki yeterince dikkate alınmamıştır. Ayrıca kararda usuli talep kavramı gözardı edilmiştir. Usulî talep bir hukukî sonucun kesin bir biçimde belirlenmesini, yani belli bir hukukî himayenin sağlanmasını konu alan ve mahkemeye yöneltilmiş bulunan istektir. Muaccel bir borcun borçlusu, alacaklının ihtarıyla temerrüde düşer. Ancak kararda muacceliyet ve temerrüt kavramları hatalı kullanılmıştır. Yine bononun ödeme için ibraz edilip edilmediği belirsiz olduğundan hüküm yeterince açık değildir ve tavzihe muhtaçtır. Bu çalışmada inceleme konusu karardaki hukuki meseleye medeni usul hukuku, medeni hukuk ve ticaret hukuku bakış açılarıyla yaklaşılarak çeşitli değerlendirmelerde bulunulmuştur. Ayrıca kararda tartışılan kurum ve kavramlara ilişkin çeşitli değerlendirmelerde bulunulmuştur.

This paper studies the interaction between fiscal commitment and sovereign default risk in a model with optimal taxation and government spending. A time-inconsistency problem arises in our framework as the government cannot credibly commit to its future tax policies. As a result, it chooses suboptimally low fiscal adjustments and defaults too frequently. Introducing a commitment device to future tax policies can mitigate this time-inconsistency problem and improve the government's borrowing opportunities. However, such a commitment device also entails a loss of tax contingency that might be costly. Our quantitative analysis shows that committing to an inflexible tax plan is counterproductive: the lack of contingency hurts the government's debt sustainability and reduces welfare. In contrast, committing to a flexible tax plan that is contingent on future economic conditions can improve debt sustainability by 53.3% and result in a significant welfare gain.

ilustraciones, diagramas Un elemento importante en el apalancamiento de las industrias o empresas es el crédito, el cual posibilita los planes de producción, de inversión, la adquisición de bienes o servicios o simplemente el alivio de estrés financiero en las organizaciones. Esta herramienta es muy utilizada por las instituciones financieras, las cuales cuentan con metodologías, políticas e información importante para otorgar el crédito. Sin embargo, cuando son las empresas del sector real las que se enfrentan a mecanismos de venta a plazo o de financiación, no se cuenta con todos los elementos para hacer operaciones de venta estratégicas y controladas, que no solo le permitan aumentar la participación en el mercado sino también evitar posibles pérdidas económicas. Con el fin de administrar mejor lo que en el argot financiero es llamado riesgo de crédito, se planteará para una empresa de prestación de servicios públicos que tiene clientes del sector industrial, empresarial y comercial, una metodología para valorar el riesgo de crédito por medio de la aplicación de técnicas estadísticas de clasificación de dichos clientes. Se analizará la aplicación de algunos métodos estadísticos, tales como la regresión logística, regresión logística multinomial, regresión logística multinomial ordinal y máquinas de soporte vectorial. Para la construcción de la metodología, se calcularon indicadores financieros, se recopiló información de morosidad interna para las empresas y se consultó información complementaria de algunos atributos geográficos y modelos alternos al interior de la compañía. Se presentan herramientas importantes para la selección de variables, balanceo de muestras y medidas de desempeño para los modelos aplicados. Entre los resultados fue necesario realizar comparaciones individuales para los modelos que presentan variables dicotómicas y los que presentan más de dos niveles en la etiqueta. Para la variable dicotómica Impago o Default, se destacaron los modelos con balanceo Oversampling tanto para la regresión logística como para el modelo de máquinas de soporte con kernel radial. Mientras que para la variable relacionada con la clasificación en tres niveles del riesgo, los modelos con mejores resultados correspondieron al modelo de máquinas de soporte con Kernel lineal o el modelo de regresión multinomial. (Texto tomado de la fuente) An important element in the leverage of industries or companies is credit, which enables production plans, investment, the acquisition of goods or services or simply the relief of financial stress in organizations. This tool is very used by financial institutions which have methodologies, policies and important information to grant the credit. However, when it is the companies of the in the real sector, those that face mechanisms of sale in installments or financing, do not have all the elements to make strategic and controlled sales, which not only allow you to increase market share but also avoid possible economic losses. In order to better manage what in financial jargon is called credit risk, will be propose for a company that provides public services that has clients from the industrial, business and commercial sector, a methodology to value credit risk through the application of statistical classification techniques. Will be analyzed the application of some statistical methods, such as logistic regression, multinomial logistic regression, ordinal multinomial logistic regression, and support machines vector. For the construction of the methodology, financial indicators, internal payment age information of the companies were compiled and complementary information of some geographical attributes and alternative models within the company was consulted. Important tools are presented for the selection of variables, sample balancing and performance measures for the applied models. Among the results, it was necessary to make individual comparisons for the models that present dichotomous variables and those that present more than two levels in the label. For the Default dichotomous variable, the models with Oversampling balancing were highlighted both for the logistic regression and for the model of support machines with radial kernel. While for the three-level rating variable, the models with the best results corresponded to the support machine model with linear Kernel or the multinomial regression model. Maestría Magister en Ciencias - Estadística Área Curricular Estadística

Las roll rates y las net flow rates pueden verse como la evolución de las ageing of accounts receivable y las cadenas de Markov. Son metodologías aceptadas para modelizar el comportamiento de los préstamos al consumo morosos por buckets y para predecir pérdidas, pero nos encontramos que con bastante frecuencia se usan incorrectamente como conceptos intercambiables, aunque las roll rates siguen cuentas individuales a través de los buckets en meses consecutivos y las net flow rates solo comparan buckets consecutivos en meses consecutivos. Determinamos sus matrices de probabilidades de transición y las analizamos en condiciones estacionarias y de estado estable. Las net flow rates tienen muchas ventajas sobre las roll rates, pero un hallazgo bastante importante para las instituciones financieras y los supervisores es que las net flow rates históricas no son conservadoras para hacer predicciones: cuando el nivel de nuevos impagos se dispara, las net flow rates contemporáneas tenderán a ser más bajas de lo que serían en condiciones de estado estable, creando un sentimiento de falsa confianza y llevando a la subestimación de las pérdidas futuras., Roll rates and net flow rates can be seen as the evolution of ageing of accounts receivable and Markov chains. They are accepted methodologies to model the behavior of non-performing consumer loans by buckets and to predict losses, but we find that quite often they are wrongly used as interchangeable concepts, although roll rates track individual accounts across buckets in consecutive months and net flow rates just compare consecutive buckets in consecutive months. We determine their matrices of transition probabilities and analyze them in both stationary and steady-state conditions. Net flow rates have many advantages over roll rates, but a quite important finding for financial institutions and supervisors is that historical flow rates are not conservative for forecasting: when the level of new delinquencies soars, contemporary flow rates will tend to be lower than they would be in steady-state conditions, creating a feeling of false confidence and leading to the underestimation of future losses., Universidad Pablo de Olavide

U.S. banks countercyclically vary the ratio of charge-offs to defaulted loans (COD) and the standard deviation of COD is roughly 15 times that of GDP. We show that canonical financial accelerator models cannot explain these facts, but introducing stochastic default costs and stochastic risk can potentially resolve the discrepancy. Estimating the augmented model and including both surprise and news shocks reveals that default cost news shocks account for most of the variance of COD. Also, in the many model specifications we work with, default cost news shocks always account for at least 20 percent of the variance of investment, while risk news shocks account for a significant portion of the variation in the credit spread, and around 10 percent of the variation in investment growth. Both news shocks also account for a material amount of the variance of hours and output growth.

We investigate the role of forward-looking financial factors in propagating the Great Depression. We find that a new hand-collected bank stock index is better at predicting the onset of the Great Depression than the aggregate stock market or failed bank deposits. The bank stock index explains almost one-third of the fluctuations in industrial production after five years. Analysis disaggregated at each Federal Reserve district shows that bank stocks capture forward-looking information about debt defaults and credit. Our results suggest that future studies of the credit channel during the Great Depression should incorporate bank stocks to better identify the impact of credit crunches on economic activity.

Default risk prediction can not only provide forward-looking and timely risk measures for regulators and investors, but also improve the stability of the financial system. However, the determinants of corporate default risk in China have not been well-identified. An empirical analysis was conducted using a unique dataset of default events in the Chinese market to fill this gap. First, we demonstrated that the default probability estimated by a structural model, which is widely used in the literature, do not fully reveal the default risk of firms in China. Second, we classified default events into minor and major defaults for empirical analysis. We found that firms that survive minor defaults behave differently from other bankrupt firms. Our results suggest that the determinants of corporate default risk in China and the United States differ. We also found that a firm’s continued increase in cash holdings is one of the most important signs of default. Overall, our study significantly improves the accuracy of forecasting corporate default risk in China.

El objetivo del presente trabajo es la construcción de un modelo credit scoring de probabilidad con la finalidad de minimizar el riesgo de incumplimiento de pago de la cartera de clientes, para lo que se utilizó variables dependientes (cliente “bueno o malo”) y como independientes (características de los clientes) para proporcionar un análisis correcto para determinar si la empresa concede o no un crédito. Se aplicó la metodología descriptiva y enfoques cuantitativos y cualitativos tomando como fuentes primarias los datos de la cartera de clientes de la empresa SEGUMAR S.A. La base de datos consiste de la información de 100 personas solicitantes de un crédito y se incluye en la medición de 7 variables para cada persona. Cada solicitante se clasifica en una de dos categorías posibles, "buen cliente" (70 casos) o "mal cliente" (30 casos). Se desarrolló una regla de credit scoring para determinar si un nuevo solicitante es “Bueno” o “Malo” cliente, basándose en los valores de una o más variables explicativas resultantes del modelo final. Este estudio evaluó las características que tienen los clientes al momento de pedir un crédito y según las características de cada cliente se puede realizar predicciones, clasificarlos como un buen o un mal cliente. En los resultados obtenidos del modelo Logit se puede concluir que las variables seleccionadas que se aplicaron en el modelo arrojaron un 76% de éxito que nos permite clasificar a cada uno de nuestros clientes como un buen cliente o mal cliente en nuestro modelo., The objective of this work is the construction of a probability credit scoring model in order to minimize the risk of default on payment of the customer portfolio, for which dependent (customer good and bad) and independent (characteristic of customer) variables were used to provide a correct analysis to determine whether or not the company grants a loan. The descriptive methodology and quantitative and qualitative approaches were applied taking as primary sources the data of the customer portfolio of the company SEGUMAR S.A. The database consists of the information of 100 people applying for a loan and is included in the measurement of 7 variables for each person. Each applicant is classified into one of two possible categories, "good customer" (70 cases) or "bad customer" (30 cases). A credit scoring rule was developed to determine whether a new applicant is a "Good" or "Bad" customer, based on the values of one or more explanatory variables resulting from the final model. This study evaluated the characteristics that customers have at the time of requesting a loan and that according to the characteristics of each customer it is possible to make predictions, classify them as a good customer or a bad customer. In the results obtained from the Logit model it can be concluded that the selected variables that were applied in the model gave us a 76% success rate that allows us to classify each of our customers as a good customer or bad customer in our model., Universidad Pablo de Olavide

This study analysed the liability of personal guarantees and legal protection for personal guarantees due to debtor defaults in credit agreements. This normative legal research examined primary, secondary and tertiary legal materials. Legal materials were collected by document study and analysed normatively and prescriptively. Forms of legal protection for personal guarantees include, such as the guarantor can ask for a return from the debtor in the condition of compensation for all losses that the guarantor may suffer as a result of non-fulfilment of obligations by the debtor; the guarantor only serves as a companion to the debtor, in the sense that as long as the debtor is current, there are no problems in the loan instalments until they are paid off. There are efforts to save credit or credit restructuring before the execution of particular collateral objects belonging to the debtor or collateral belonging to personal guarantees.The bank, as the creditor, should provide an understanding to the prospective guarantor about his function and position as a guarantor to avoid the risk of loss on the part of the guarantor. The debtor should determine if the guarantor is adequate in finances and understands his position as a guarantor. The guarantor should have good faith in helping the debtor in the event of default so that the implementation of the credit agreement can run smoothly until the credit is repaid so that, in the future, it can carry out all responsibilities to the fullest. Further, in the personal guarantee agreement, it is best if the heirs of the personal guarantee are notified in advance when the deal takes place to avoid inheritance disputes.

After the US dollar replaced gold, the US debt became attention worldwide, thus the demand for the US dollar continued, as the extremely low interest of the dollar. This helped the US government to borrow great amounts of debt as well as kept the creditors pleased. Due to the pandemic, the US economy retrograded because of the tax cut and unproductive rescue spending plan plus surpassing spending of the government. The acceleration of inflation looms, whereas the recession is begging to appear; certainly, the government must cut back on spending or its patterns, while this will lead to uncertain consequences for the long future. Whereas increasing the interest rate will be not the right solution for the long term, on the contrary, will lead to dire economic consequences. This paper discusses several different perspectives on the US government's sustainability as its ability to settle the debt in future, the fate of growth burdened with that debt through the neoclassical mode of growth, and also the effect of anxiety of defaults and unfunded obligations. Inversely, it explores the strength of the dollar with a low-interest rate and its sustainability worldwide. We also propose ways helping of strengthen the fiscal government position and solutions to help the economy recover in the long term and to easiest the situation. In the synopsis, we propose something that could affect and shake the global market.

RESUMO Este estudo investiga a relação entre os tipos de garantia oferecidos em empréstimos ao produtor rural no Brasil e o acesso, as condições de crédito e a inadimplência. Usamos uma base de dados proprietária e inédita de crédito rural de um grande banco privado brasileiro com mais de 110 mil observações de empréstimos. Os resultados apontam que o uso da alienação fiduciária permite que tomadores mais opacos (i.e., com menor tempo de relacionamento com o banco) consigam acesso a crédito. Esse tipo jurídico de garantia dá ao banco a capacidade de retomar o ativo mais rapidamente, reduzindo a perda em caso de inadimplência, mesmo que os tomadores sejam mais arriscados, uma vez que apresentam maiores taxas de inadimplência (default). Nossos resultados mostram que as condições dos empréstimos são menos restritivas com o aumento do tempo de relacionamento bancário, e que esse efeito é mais intenso nos empréstimos com alienação fiduciária. RESUMEN Este estudio investiga la relación entre los tipos de garantía ofrecidos en los préstamos a los productores rurales en Brasil, el acceso al crédito, las condiciones del préstamo y el incumplimiento. Utilizamos una base de datos propietaria e inédita de crédito rural de un gran banco privado hrasileno con más de 110 mil observaciones de préstamos. Los resultados muestran que el uso de la alienación fiduciaria permite a los prestatarios más opacos (es decir, con menor tiempo de relación con el banco) acceder al crédito. Ese tipo de garantía le da al banco la capacidad de recuperar el activo más rápidamente reduciendo la pérdida en caso de impago, incluso si esos prestatarios son más riesgosos, ya que presentan mayores tasas de incumplimiento. Nuestros resultados también muestran que las condiciones de los préstamos son menos restrictivas a medida que aumenta la duración de la relación bancaria, y que este efecto es más intenso en los préstamos con alienación fiduciaria. ABSTRACT This study investigates the relation between the types of collateral offered in rural loans in Brazil and the access to credit, loan conditions and default rates. We use a novel proprietary database of rural loans granted by one of the largest private banks in Brazil containing more than 110 thousand loan observations. Our results show that the use of fiduciary lien, improves the access to loans for more opaque borrowers (i.e., those with shorter relationship with the bank). This type of collateral gives the bank the ability to seize collateral quicker, reducing loss given default, even if these borrowers are riskier, given that they present higher default rates on average. Our results also show that loan conditions are less restrictive as relationship length increases, and that this effect is more intense among loans collateralized by fiduciary lien.

Purpose: Credit risk has become a serious issue in the present scenario. No banking transactions are free from credit risk. Banks can survive in the modern world only if they can manage the risk efficiently. The study is been undertaken to find out the different types of loans provided by Canara Bank and the rate of default resulting in NPA over 5 years. The author mainly considered the study on loans provided by Canara Bank and the credit risk encountered by the bank due to non-payment of loans and the interest amount on the due date. Methodology: Qualitative research is grounded on secondary data. Information is gathered through annual reports, manuals, previous bank records and balance sheets. For depth information, Focus group interactions with the manager and the staff are carried out. Findings: Better credit risk policy of the bank reduces the NPA percentage which in turn increases the profitability of the bank. Originality: The study highlights the effect of profitability due to credit risk arising out of NPAs. Paper type: Case study

Despite a serious need for sustainable alternative water supplies in many parts of the world, public opposition remains a barrier to implementing solutions such as safe wastewater recycling schemes. Here, we compared two strategies to increase acceptance of recycled water: default nudges and informing choices. Experiment 1 (N = 81) showed that defaults increased acceptance of recycled water. Experiment 2 (N = 142) replicated the effect but also indicated that weak educational interventions (simple infographics) interacted with confidence, such that those who switched from the default option had measurably higher confidence in their choice when given the infographic. Experiment 3 (N = 146) suggested that in a college undergraduate sample, strong educational interventions (educational videos) eliminated the effect of nudges on recycled water acceptance, increased acceptance, increased knowledge of recycled water, and also interacted with confidence in the same way observed in Experiment 2. Experiment 4 (N = 271) showed that strong educational interventions can also increase recycled water acceptance in an MTurk sample. Since both education and defaults may be effective, we suggest that future work would benefit from cost-benefit analyses between strategies. (PsycInfo Database Record (c) 2022 APA, all rights reserved).

Standard models on firm valuation, incorporating risky debt, assume a certain tax treatment of a cancellation of indebtedness (COD). Most valuation procedures solely discuss two polar cases: either the COD is strictly taxed on its entirety or not taxed at all. Considering the predominant national tax jurisdictions in G7 and many other countries, this assumption is far from being realistic. We model a state dependent taxation of a COD considering the firm's state in default and further contingencies, including a partial taxation. We show how to include this stochastic interdependency into the pricing of the value of the tax shield and the WACC. Compared to the case of full taxation of a COD this potentially increases the value of tax savings and decreases the discount rate, since less taxes are paid in states with exceptions of a tax on a COD, vice versa for the case of no taxation on a COD. Furthermore, in case of an exemption from taxation of a COD, pricing equations depend on the distribution of total losses on interest and principal payments.

Financially constrained mortgage servicers destroyed substantial MBS investor value during the financial crisis through their management of delinquent mortgages. Servicers advance to investors monthly payments missed by borrowers. In order to minimize this obligation to extend financing to distressed borrowers, constrained servicers aggressively pursued foreclosures and modifications at the expense of investors, borrowers, and future mortgage performance. When agency frictions between the servicer and the investor are higher, the servicer’s financial constraints matter more. IV regressions suggest that, on average per defaulted loan, servicers’ financial constraints are responsible for 20% of the total investor value reduction during the financial crisis.

The recovery rate on defaulted corporate bonds has a time-varying distribution, a topic that has received limited attention in the literature. We apply machine learning approaches for intertemporal analysis of U.S. corporate bonds’ recovery rates. We show that machine learning techniques significantly outperform traditional approaches not only out-of-sample as documented in the literature but also in various out-of-time prediction setups. The newly applied sparse power expectation propagation approach provides the most compelling out-of-time prediction results. Motivated by the association of systematic factors with the time-varying characteristic of recovery rates, we study the effect of text-based news measures to account for bond investors’ expectations about the future which translate into market-based recovery rates. Especially during recessions, government-related news are associated with higher recovery rates. Although machine learning is a data-driven approach rather than considering economic intuition for ranking a group of predictors, the most informative groups of predictors for recovery rate prediction are nevertheless economically meaningful.

This paper studies the link between credit availability and student loan repayment using administrative federal student loan data. We demonstrate that policy-driven changes in credit available to high-default institutions explains almost all of the historical time-series variation in defaults. Between 1981 and 1988, eligibility for federal loans was expanded, leading to the entry of institutions with borrowers more likely to default. From 1988 to 1992, credit access was tightened, leading to the exit of many institutions with high default rates. After 1992, the cycle was repeated, with credit access gradually loosened by unwinding many of the pre-1992 reforms.

Bank of recent year plays a significant role in the development of the nation. The bank offers a few things that are directly dependent on any nation's general economic and financial condition. Banking efficiency leads to the business, growth in the industry, economic growth, and support for the common man with savings, improving financial security. Bank Loan has been one of the fastest-growing financial services banks in recent years. However, with the increasing number of bank loan users, banks face an ever-increasing rate of bank loan decline. This program is offered primarily to a person or company of higher value than another. Under this scheme, a small amount can be provided as a cash transfer or electronic transfer to the debtor when they can be in demand. Few of them have not returned a set amount in time, so sometimes they do not. This situation creates a problem for the bank. Then with the help of historical data, the need to predict bank loan error can be determined. As such, machine learning may offer options for addressing the current issue and handling credit risk. This analysis has the function of forecasting the inability to pay the bank loan. The study found more than 10 million Bank of Taiwan records. Analysis of the logistic regression hits the relation between the class variable and the set of independent variables. The primary analysis produces exploratory views of data correctly. Further, this paper used ML algorithms to get predictions with accuracy to detect the default users based on transactional data.

This study evaluates a wide range of machine learning techniques such as deep learning, boosting, and support vector regression to predict the collection rate of more than 65,000 defaulted consumer credits from the telecommunications sector that were bought by a German third-party company. Weighted performance measures were defined based on the value of exposure at default for comparing collection rate models. The approach proposed in this paper is useful for a third-party company in managing the risk of a portfolio of defaulted credit that it purchases. The main finding is that one of the machine learning models we investigate, the deep learning model, performs significantly better out-of-sample than all other methods that can be used by an acquirer of defaulted credits based on weighted-performance measures. By using unweighted performance measures, deep learning and boosting perform similarly. Moreover, we find that using a training set with a larger proportion of the dataset does not improve prediction accuracy significantly when deep learning is used. The general conclusion is that deep learning is a potentially performance-enhancing tool for credit risk management.

We study default in a multifirm equilibrium setting with incomplete information. Defaults are consistent with the firm’s balance sheet and aggregation. We show that the endogenous volatility and jump size of debt and equity generated by other firms’ shocks vanish as the number of firms in the economy increases. As a result, credit spreads depend asymptotically only on the firms’ own cash flow risk. Our vanishing contagion spread result calls into question recent findings based on production economies, in which quantities of risk (volatilities and jump sizes of securities) are specified exogenously, that attribute credit spreads mostly to contagion. This paper was accepted by Kay Giesecke, finance.

The algorithm for optimization of a credit portfolio has not been fully demonstrated. This paper fills the gap in the literature by presenting a general approach for optimizing a credit portfolio by minimizing the default risk of the entire portfolio. Default risk is measured with quadratic weighting and a matrix containing information about the default intensity of two stocks and the correlation in default between them. The default correlation and the default intensity are represented with a novel bivariate intensity model. A multi-objective genetic algorithm is introduced to optimize a credit portfolio with the purpose of overcoming limitations in the analytical method and improving the efficiency of optimization. The algorithm can be applied to a portfolio's credit risk management, which is particularly crucial for investors and regulars in emerging markets.

The debtor's efforts against the creditor's default in the loan agreement is the main point in the writing of this law. The purpose of the legal research is to find out the debtor's efforts to default on the creditor in the loan agreement and to find out the legal consequences of the creditor default in the loan agreement. The research method used in writing this law is normative legal research using qualitative analysis. An agreement that was born because of a mutual agreement lays down the rights and obligations between the parties and binds them to carry out the agreement. The parties have the same obligations and the same rights. A debtor has the right to get achievements and so does a creditor have the right to get achievements. However, the fact is that creditors often do not fulfil their obligations to excel but instead accuse the debtor of neglecting to excel. In addition, the provisions of creditor default and cancellation of the agreement are often not included in the deed of agreement. The results of research and data analysis that 1). The debtor's effort to default on the creditor in the land loan agreement is to use the principle of exceptionnon-adimpleticontracts, namely a rebuttal which states that the debtor does not carry out the agreement properly precisely because the creditor himself does not carry out the agreement properly. 2). The legal consequence of a loan agreement with a land certificate as collateral for a creditor default is that it can be cancelled where the cancellation must be requested by the court., {"references":["Gatot Supramono, 2013, Perjanjian Pinjam meminjam, Ctk. Pertama, Kencana Prenada Media Grup, Jakarta.","Harlien Budiono, 2010, Kumpulan Tulisan Hukum Perdata di Bidang Kenotariatan, Buku Kedua, PT.Citra Aditya Bakti, Bandung","Gunawan Widjaja, 2004, Perikatan yang Lahir dari Perjanjian, Raja Grafindo Persada, Jakarta","M.Yahya Harahap, 1986, Segi-Segi Hukum Perjanjian, Cet.2, Alumni, Bandung'","Muhammad Syaifuddin, 2016, Hukum Kontrak, Cet. 2, CV. Mandar Maju, Bandung","Riduan Syahrani, 2004, Seluk-beluk dan Asas-asas Hukum Perdata, Alumni, Bandung","Subekti, 2005, Hukum Perjanjian, Intermasa, Jakarta","Sudikno Mertokusumo, 2005, Mengenal Hukum Suatu Pengantar, Liberty, Yogyakarta"]}

Trust and reciprocity promote cooperation and are key elements of a successful social life. This study investigated the framing effects on trust and reciprocity behaviors. Using an iterated one-shot within-subjects design, this study explored how trust and reciprocity decisions changed when the game was framed in terms of a give (i.e., using a standard trust game with a default of no trust) and a take (e.g., using a distrust game with a default of full trust) frame. Participants of both genders first completed the scenario version of the game (Session 1), and then played the roles of trustors (Session 2) and trustees (Session 3) with human and computer-mediated human partners either in the give or take frame. Our results showed increased trust in the give than in the take frame, but only pronounced in direct interaction with human (vs. indirect computer-mediated) partners. Participants also showed higher expectations of return in the give than in the take frame. The actual reciprocity was higher in the give than in the take frame when interacting both with human and computer-mediated human partners. The results contribute to our understanding of the factors that shape trust and reciprocity and emphasize the impact of framing the default.

Das Ziel dieser Diplomarbeit ist es, Methoden zur Schätzung der Ausfallwahrscheinlichkeit in risikoarmen Wertpapierportfolios zu untersuchen, einen theoretischen Hintergrund zum Kreditrisiko und seine Bedeutung zu geben, sowie einen Überblick über die aktuellen Vorschriften zur Modellierung für diese Portfolios zu spezifizieren. Es wird näher erläutert, warum die Analyse solcher Modelle für Banken von großer Bedeutung ist. Es werden drei verschiedene Ansätze für die Modellierung der Ausfallwahrscheinlichkeit definiert. Diese Ansätze sind das kumulative Genauigkeitsprofil, die Operationscharakteristik eines Beobachters und der Bayessche Ansatz. Um diese Ansätze zu testen und die Ergebnisse zu vergleichen, werden fiktive Datensätze verwendet., The aim of this thesis is to study methods for estimating probability of default in low risk securities portfolios, to give a theoretical background on credit risk, its importance as well as review of the current regulations on modeling for these portfolios. It will be explained in further detail, why analysis of these kind of models is of high importance for banks. Definition of three different approaches for modeling of probability of default will be given. These approaches are cumulative accuracy profile, receiver operating characteristic and Bayesian approach. Fictitious data set will be used to test these approaches and to compare results.

Tiesību zinātne Tiesību zinātne Law Science Law Science Darbā pētāmās tēmas aktualitāte ir pamatota ar atziņu, ka tādi notikumi, kā, piemēram, Covid-19 vīrusa izplatība un valsts noteiktie ierobežojumi ar mērķi to ierobežot, kā arī karadarbība Ukrainā un Eiropas Savienības sankcijas pret Krieviju un Baltkrieviju, ne tikai pasaulē, bet arī Latvijā ir izraisījuši straujas izmaiņas civiltiesiskajā apritē un tautsaimniecībā, radot arvien biežāku nepieciešamību piesaukt nepārvaramas varas apstākļus līgumu izpildē. Bakalaura darbs “Nepārvaramas varas - tiesiskais regulējums un problemātika” izstrādāts, lai apzinātu problemātiku attiecībā uz saistību izpildi nepārvaramas varas apstākļu iestāšanās gadījumā un piedāvātu priekšlikumus Civillikuma Saistību tiesību daļas uzlabošanai. Bakalaura darba mērķis – izanalizējot nepārvaramas varas jēdzienu, tiesiskās sekas un tiesisko regulējumu, identificēt problemātiku, izdarīt secinājumus un piedāvāt priekšlikumus tiesiskā regulējuma uzlabošanai. Pētījumā gūtā galvenā atziņa - pēdējo trīs gadu notikumi ir pierādījuši, ka ir nepieciešams veikt izmaiņas Saistību tiesību jomā, tādējādi ir nepieciešams integrēt nepārvaramas varas regulējumu Civillikumā. Bakalaura darbs sastāv no trīs nodaļām. Darbā tiek izmantoti normatīvie akti, zinātniskā literatūra, publikācijas, ekspertu viedokļi un atziņas, kā arī tiesu prakse un elektroniskie resursi. Darba apjoms ir 77 lapaspuses. The actuality of the topic researched at work is justified on the recognition that events such as the spread of the COVID-19 virus and restrictions imposed by the state with the aim of limiting it, as well as hostilities in Ukraine and European Union sanctions against Russia and Belarus, not only in the world, but also in Latvia, have led to rapid changes in the economy and civil legal movement, making it increasingly necessary to invoke conditions of force majeure in the performance of contracts. The work of bachelor's “Legal regulation and problematics of force majeure” is developed to identify the problematics of fulfilling obligations in case of force majeure and to offer proposals for improvement of the Civil law Obligations law part. The aim of the bachelor's work - by analyzing the concept of force majeure, legal consequences and legal regulation, to identify problems, draw conclusions and propose proposals for improving the legal regulation. The main conclusion obtained in the research - the events of the last three years have shown that it is necessary to make changes in the field of Obligation Law, thus it is necessary to integrate the regulation of force majeure into the Civil Law. The bachelor's work consists of three chapters. The work uses normative acts, scientific literature, publications, expert opinions and insights, as well as judicial practice and electronic resources. The volume of the bachelor's work is 77 pages.

Článek analyzuje přístup judikatury Nejvyššího soudu a Ústavního soudu k limitům smluvní volnosti při sjednávání úroku z prodlení. Rozebírá důsledky rozdílů v pohledu obou soudů na tuto problematiku zejména z hlediska předvídatelnosti soudního rozhodování a právní jistoty stran. Věnuje se také odborné diskusi zaměřené na vztah úroku z prodlení a smluvní pokuty za prodlení s plněním peněžitého dluhu ujednané stejným způsobem jako úrok z prodlení. Úvahy o stejné funkci a podobnosti obou institutů považuje za relevantní, a to zejména v souvislosti s řešením důsledků nastupujících v případech, kdy ujednaná výše sankce za prodlení je nepřiměřená a tíživá. Nicméně, autorka poukazuje na to, že vzhledem k současné úpravě smluvní pokuty a úroku z prodlení nelze prostředky dané soudům pro zmírnění důsledků nepřiměřené výše smluvní pokuty (moderaci podle § 2051 o. z.) využít i pro případy neúměrně vysokých úroků z prodlení. Sjednocení režimu těchto důsledků může přinést jen nová právní úprava. The article looks into the approach of the Supreme Court and the Constitutional Court to the limits of contractual freedom in negotiating default interest. It analyses the consequences of the differences in the views of both courts on this issue, especially in terms of predictability of judicial decision-making and legal certainty of the parties. It also takes into account professional discussion focused on the relationship between default interest and contractual penalties for delay in the payment of the debt agreed in the same way as default interest. It considers opinions emphasizing the same function and similarity of both instruments to be relevant, especially in connection with consequences arising in cases where the agreed amount of the penalty for delay is disproportionate and burdensome. However, the author points out that the current regulation of contractual penalties and default interest, does not allow the courts to apply the means of mitigation of the disproportionate amount of the contractual penalty (moderation under Section 2051 of the Civil Code) also in cases of disproportionately high default interest. Only new legislation can unify the regime of these consequences.

Many decisions in organizations, politics, and economics are made collectively by groups. Often, other people who are not part of the decision-making process are affected by the resulting outcomes. Therefore, it is important to understand how individual group members are held accountable for the collective decision. In a recent paper, Bartling et al. (2015) analyzed the attribution of responsibility for collective decisions in a sequential voting game, in which three decision makers sequentially decide on an equal or unequal allocation implemented for themselves and three other recipients. They found that the pivotal decision maker was punished significantly more than non-pivotal decision makers. However, it remains unclear what other factors influence the attribution of responsibility for collective decisions. Therefore, this study extends the work of Bartling et al. (2015) in two ways: first, the decision right is assigned through one of two different (legitimate) mechanisms, and second, one allocation is already preselected as the default. The assignment of individual responsibility is measured by eliciting the punishment choices of the recipients. Interestingly, the legitimacy of the group-building mechanism has no significant effect on the assigned responsibility. However, choosing the default is associated with less punishment, as long as other punishment motives are not controlled for. Additionally, the main result of Bartling et al. (2015), that the pivotal decision maker is punished significantly more, could not be replicated. Instead, the unkindness of a decision determines the punishment behavior of recipients.

Sovereign debt restructurings are associated with declines in the growth of GDP, investment, bank credit to the private sector and capital flows. Our empirical findings show that the intensity of these losses depends on two aspects: whether the restructuring preempts a default and the extent of the country’s reliance on bank intermediation. Post-default restructurings are associated with worse outcomes than restructurings that take place preemptively without missing payments to creditors and going into default. Much of that difference is driven by the particularly adverse effects experienced after post-default restructurings in countries with relatively larger banking sectors.

Research background: SMEs face financial constraints in their development, which limits their access to external funds, tightens their investment possibilities, and limits their growth. Much research effort has been devoted to understanding the nature and sources of this phenomenon. In sharp contrast to this, very little has been said about the role of these factors in explaining the default probability of these types of enterprises. Understanding such interrelationships could help to adopt policies to alleviate the situation of constrained SMEs and lower their default rates. Purpose of the article: This study analyses the role of financial constraint factors in SME defaults. This is done by utilising the financial constraint factors in a newly derived default prediction model. A comparison of the derived model and other SME default prediction models is carried out to assess the potential of financial constraints in the discrimination power of the model. Methods: In this study, we use the Cox semiparametric model, while leaving the baseline hazard rate unspecified and employing macroeconomic variables as explanatory variables. The discrimination power was addressed in terms of the area under the curve (AUC), resulting in out-of-sample testing. The DeLong test was used to compare the AUC of the created and analysed models. The model was estimated on a set of over 213,731 SMEs from 28 counties, covering the period 2014?2019. Findings & value added: It was found that adopting the financial constraint measures can explain the default of small and medium enterprises with high accuracy; however, they do not explain the default of micro enterprises.

We offer a model and evidence that private debtholders play a key role in setting the endogenous asset value threshold below which corporations declare bankruptcy. The model, in the spirit of Black and Cox (1976), implies that the recovery rate at emergence from bankruptcy on all of the firm's debt taken together is increasing in the pre-bankruptcy share of private debt in all debt. Empirical evidence supports this and other implications of the model. Indeed, debt composition has a more economically material empirical influence on recovery than all other variables we try taken together.

Using comprehensive credit bureau data, we document that consumers who borrow from marketplace lending (MPL) platforms have lower credit scores and higher default rates in the long run relative to observably similar applicants for bank loans. The long-run credit scores and default rates of MPL borrowers are especially worse when the MPL platforms provide less information to MPL investors, when MPL borrowers are benchmarked against relationship bank borrowers, and for one-time MPL borrowers as compared to repeat MPL borrowers. Overall, our results suggest that MPL lenders face greater information asymmetries with respect to their borrowers than traditional banks.

This study examines effect of financial distress, debt default, audit delay and leverage on going concern audit opinions on Textile and Garment Subsector Manufacturing Companies listed on the Indonesia Stock Exchange for the 2017-2019 period. This research uses descriptive quantitative research. The sample of this research is 51 samples. Data processing using logistic regression analysis. The results of the research show that financial distress, debt default, audit delay and leverage have no effect on going concern audit opinions on Textile and Garment Subsector Manufacturing Companies listed on the Indonesia Stock Exchange for the 2017-2019 period. Keywords: Financial Distress, Debt Default, Audit Delay, Leverage, Going Concern Audit Opinions.

We test the ability of the Decoy Effect to enhance debt collection efforts and find that by disclosing the Annual Percentage Rate (APR) in settlement offers, participants are less influenced by the decoy and more apt to select the repayment option that is in their best interest. At the same time, by reporting the APR, borrowers are more willing to make repayments on the modified loan, resulting in a net gain to debt collection efforts. Because disclosing the APR is Consumer Financial Protection Bureau (CFPB) compliant, this simple disclosure has the ability to increase debt collection returns while helping borrowers make better decisions when selecting debt modification repayment plans. Our results suggest an applicability to all types of defaulted debt including mortgages, sub-prime auto loans, credit cards, student loans, and payday loans.

Turkey is one of the few countries that has introduced national-level automatic enrollment in private pension systems to encourage people to save for retirement. Although the policy's effectiveness is debatable, it is fair to conclude that it has accelerated enrolment in individual pension plans. This is due to the fact that defaults have a significant impact on saving behavior. However, there are few empirical data that explain how defaults operate. To find out, we created a survey for Ankara public employees in order to explore possible demographic, financial, and behavioral constructs for automatic enrollment choices. Gender, marital status, and the number of dependents in the family all have an impact on the decisions. Other noteworthy findings concern behavioral constructs: Ankara public employees who find individual pension systems complex are more likely to opt out, and the public authority endorsement effect greatly reduces the risk of quitting the system. These findings show that there is a need for more educational and informational efforts on the pension system, and that policymakers have a significant amount of responsibility as a result of this strategy.

To deal with the systematic risk of financial institutions and the rapid increasing of loan applications, it is becoming extremely important to automatically predict the default probability of a loan. However, this task is non-trivial due to the insufficient default samples, hard decision boundaries and numerous heterogeneous features. To the best of our knowledge, existing related researches fail in handling these three difficulties simultaneously. In this paper, we propose a weakly supervised loan default prediction model WEAKLOAN that systematically solves all these challenges based on deep metric learning. WEAKLOAN is composed of three key modules which are used for encoding loan features, learning evaluation metrics and calculating default risk scores. By doing so, WEAKLOAN can not only extract the features of a loan itself, but also model the hidden relationships in loan pairs. Extensive experiments on real-life datasets show that WEAKLOAN significantly outperforms all compared baselines even though the default loans for training are limited.

A high-quality and granular probability of default (PD) model is on many practical dimensions far superior to any categorical credit rating system. Business adoption of a PD model, however, needs to factor in the long-established business/regulatory conventions built around letter-based credit ratings. A mapping methodology that converts granular PDs into letter ratings via referencing the historical default experience of some credit rating agency exists in the literature. This paper improves the PD implied rating (PDiR) methodology by targeting the historical credit migration matrix instead of simply default rates. This enhanced PDiR methodology makes it possible to bypass the reliance on arbitrarily extrapolated target default rates for the AAA and AA+ categories, a necessity due to the fact that the historical realized default rates on these two top rating grades are typically zero.

Credit ratings from the major rating agencies failed to signal the true risk content of residential mortgage-backed securities (RMBS), collateralized debt obligations (CDOs), and commercial mortgage-backed securities (CMBS) issued from 2005 through 2007. This article compares the failures across rating agencies and asset classes, using data filed by the rating agencies with the Securities and Exchange Commission (SEC). The data confirm the terrible performance of RMBS ratings. The likely causes include a combination of the breakdown of mortgage industry lending practices and the concurrent deterioration of rating agency practices. The data show that CDO ratings perform somewhat better than RMBS ratings. That result is perhaps surprising and likely reflects the confounding effects of the SEC’s definitions of its reporting categories. The data also show bad performance for CMBS ratings although the underlying causes differ from those driving the results for RMBS and CDOs. Moreover, the data show high levels of rating withdrawals across all asset classes, raising the question of possible underreporting of defaults. Key Findings ▪ Rating agency data reported to the SEC confirm the terrible performance of RMBS ratings, with triple-A-rated RMBS displaying 10-year default rates of 30% to 35% as of year-end 2017. The likely causes include a combination of the breakdown of mortgage industry lending and securitization practices and the concurrent deterioration of rating agency practices. ▪ The data show that CDO ratings performed better than RMBS ratings, likely because the data include ratings for many synthetic corporate CDOs. Other studies indicate that performance is significantly worse for CDOs backed by structured finance assets. ▪ CMBS ratings also performed poorly. Although CMBS rated triple-A displayed 10-year default rates of only 2% to 3%, those rated double-A had default rates of 12% to 19% while single-A-rated CMBS default rates were 23% to 32%. ▪ The data document high levels of unexplained rating withdrawals on structured finance securities. The effect of such withdrawals may be to artificially depress the reported default rates.

In the process of production and operation, the funds held by enterprises often do not meet the needs of the expanding production scale, so enterprises usually obtain the required funds by borrowing. However, the financing mode of enterprises is not only limited to borrowing from banks or other financial institutions. With the rapid economic development and the continuous activity of the capital market, the bond market has gradually become an important channel for enterprise financing [1]. In order to improve the layout of the industrial chain, Guangyi Technology has carried out continuous mergers and acquisitions (M&A) since 2013. Due to its limited funds, Guangyi Technology acquired a large amount of funds required for M&A by means of equity pledge. However, the copyright cloud project invested in M&A in the early stage did not achieve the expected results, leading to a frequent breach of equity pledge, which evolved into debt defaults. Therefore, this article takes Guangyi Technology as the research subject and puts forward relevant avoidance suggestions through the evaluation of its debt default risk.

This article or writing aims to discuss the Fiduciary Guarantee Law which has provided rules regarding the execution of the Fiduciary Guarantee object, but the fact is that in the field executions carried out by financial institutions do not comply with the applicable laws and regulations. carried out by financial institutions deviations and acts against the law occur. The obligation to register fiduciary guarantees is strengthened by the existence of PMK RI Number 130/PMK.010/2012 concerning Registration of Fiduciary Guarantees for finance companies that carry out consumer financing for motor vehicles with the imposition of fiduciary guarantees. The discussion focuses on how the provisions of Indonesian National law regulate the execution of fiduciary guarantees on movable objects against defaulting debtors? and how is the execution mechanism of fiduciary guarantees on movable objects against defaulting debtors. The procedure used to collect data in this study is in the form of documentation, namely the guidelines used in the form of notes or quotes, searching for legal literature, books and others related to the identification of problems in this study both offline and online. Analysis of legal materials is carried out using the content analysis method (centent analysis method) which is carried out by describing the material of legal events or legal products in detail in order to facilitate interpretation in the discussion. This paper will then be analyzed qualitatively. The purpose of this study is to find out the provisions of Indonesian National law governing the execution of fiduciary guarantees on movable objects against defaulting debtors and the mechanism of execution of fiduciary guarantees on movable objects against defaulting debtors. This study concludes that Fiduciary is the transfer of ownership rights to an object on the basis of trust provided that the object whose ownership rights are transferred remains in the control of the owner of the object. Article 1 of Law Number 42 of 1999 concerning Fiduciary Security (Law Number 42 of 1999 concerning Fiduciary Guarantee ). While Fiduciary Guarantee is a guarantee right on movable objects, both tangible and intangible and immovable objects, especially buildings that cannot be encumbered with mortgage rights as referred to in Law Number 4 of 1996 concerning Mortgage Rights which remain in the control of the Fiduciary Giver, as collateral for the repayment of certain debts, which gives priority to the Fiduciary Recipient over other creditors. (Article 1 of Law Number 42 of 1999 concerning Fiduciary Security).

The Covid-19 pandemic has significantly impacted the economic sector, especially the banking sector in obtaining debt repayments from debtors. To obtain debt repayment from a defaulting debtor, it can be done by selling debt guarantees that have been tied with Mortgage Rights. This study aims to examine and analyze the legal rules, mechanisms and obstacles faced in the implementation of the Mortgage Execution auction through the internet media during the Covid-19 pandemic based on the ITE law. This study uses a normative juridical legal research method with a historical, explanatory and synchronization legal approach using primary, secondary and tertiary legal materials then data analysis is carried out qualitatively. The results of the study show that the auction of Mortgage executions through the internet media during the Covid-19 pandemic based on the ITE law at the Medan KPKNL has been carried out based on applicable law and the resulting auction minutes are valid authentic deeds. However, it is still necessary to improve both in terms of regulations and support systems so that auctions via the internet can be carried out effectively, transparently, accountable, fair, and guarantee legal certainty.

Peer-to-peer (P2P) lending has emerged as an alternative method of financing. Keeping pace with this development, many P2P lending studies have provided approaches to select investment portfolios for individual lenders. However, none of these approaches consider how long it takes for an individual loan to be fully funded so as to reduce the opportunity cost incurred due to delayed investment. In this paper, we propose a goal programming framework to develop an optimal P2P lending portfolio that considers not only the expected returns but also this opportunity cost for individual investors. First, for each loan proposal, a logistic regression model is used to predict the loan default probability while a Weibull regression is used to determine the opportunity cost incurred due to the time taken to obtain the loan. Next, goal programming is applied to construct a portfolio that minimizes the slack from the desired return on investment as well as the surplus from the preset opportunity cost due to a prolonged bidding period. The proposed approach is then applied to Prosper platform data and is expected to help investors’ portfolio decisions in the P2P lending market.

When the Ottoman Empire defaulted on its public debt in 1875, British bondholders launched a campaign to win government intervention on their behalf. This article interprets the unprecedented success of this campaign as a matter of knowledge production. Mobilizing the newly established Corporation of Foreign Bondholders as a kind of ‘centre of calculation’, bondholders argued that they deserved assistance because of the unique size of the Ottoman default and the proportion of it that was held by British subjects. Yet neither of these numbers was easily calculated. In fact, influential bondholders worked closely with accountants and members of the Statistical Society to devise an accurate method for quantifying the Ottoman debt – and concluded that such a method did not exist. Historians of quantification and accounting have argued that the scientific status of nineteenth-century accounting depended on its disinterestedness. In the case of the Ottoman default, however, calculation was understood to be inseparable from material interest and political debate.

In the late 18th century, lenders’ right to imprison borrowers for defaulting on debts was taken for granted. By the mid-19th century, this power was widely and permanently revoked. Using a variety of archival evidence, this study explains the historical demise of the debtors’ prison in New York State, the first Western jurisdiction to permanently abolish imprisonment for debt. Tracing seven decades of contestation over moral aspects of credit exchange and incarceration, it shows that the development of capitalist markets, including their cultural and technological consequences, was necessary but not sufficient to render the debtor's prison obsolete. Rather, the development of a liberal polity and a penal state institutionalized new moral views about the use of force in economic exchange, consolidating the legitimacy of bodily detention around the punishment of crimes rather than the coercion of private agreements. The analysis has implications for theories of states, markets, and violence, as well as for recent trends in penal debt, debt resistance, and prison abolition.

We analyze contract-level data on approved and rejected microloans to assess the impact of a new credit registry in Bosnia and Herzegovina, a country with a competitive microcredit market. Our findings are threefold. First, information sharing reduces defaults, especially among new borrowers, and increases the return on lending. Second, lending tightens at the extensive margin as loan officers, using the new registry, reject more applications. Third, lending also tightens at the intensive margin: microloans become smaller, shorter, and more expensive. This affects both new borrowers and lending relationships established before the registry. In contrast, repeat borrowers whose lending relationship started after the registry introduction begin to benefit from larger loans at lower interest rates.

Small- and medium-sized enterprises (SMEs) have a crucial influence on the economic development of every nation, but access to formal finance remains a barrier. Similarly, financial institutions encounter challenges in the assessment of SMEs’ creditworthiness for the provision of financing. Financial institutions employ credit scoring models to identify potential borrowers and to determine loan pricing and collateral requirements. SMEs are perceived as unorganized in terms of financial data management compared to large corporations, making the assessment of credit risk based on inadequate financial data a cause for financial institutions’ concern. The majority of existing models are data-driven and have faced criticism for failing to meet their assumptions. To address the issue of limited financial record keeping, this study developed and validated a system to predict SMEs’ credit risk by introducing a multicriteria credit scoring model. The model was constructed using a hybrid best–worst method (BWM) and the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS). Initially, the BWM determines the weight criteria, and TOPSIS is applied to score SMEs. A real-life case study was examined to demonstrate the effectiveness of the proposed model, and a sensitivity analysis varying the weight of the criteria was performed to assess robustness against unpredictable financial situations. The findings indicated that SMEs’ credit history, cash liquidity, and repayment period are the most crucial factors in lending, followed by return on capital, financial flexibility, and integrity. The proposed credit scoring model outperformed the existing commercial model in terms of its accuracy in predicting defaults. This model could assist financial institutions, providing a simple means for identifying potential SMEs to grant credit, and advance further research using alternative approaches.