Trade Receivables Financing Post the Credit Crunch. Alastair Malcolm. Trade Receivables. Trade debt exceeds bank debt by a factor of 3:1 An undervalued asset on a Corporate’s balance sheet (every £1 not bank-funded is Corporate capital) Receivables-backed loans impact Bank’s balance sheet
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Trade Receivables Financing Post the Credit Crunch
The Perfect Storm
Clearly in the past few years, there was too much short-run focus, too
Much "take the Money and run" behaviour. This was partly driven by the
belief that housing prices will Always go up and partly by the belief that
if a problem with a loan occurs, it will be somebody else's problem.
What is galling in all of this is that the guys at the major commercial and
investment banks kept telling us, "We understand risk and we can
manage risk and get higher returns;" but it turns out that most of them
did not understand anything about risk.
Lawrence J. WhiteProfessor of EconomicsNYU Stern School of BusinessMay 2, 2008
Basel II and the Current Environment
Will risk bite back if U/W Remove the chains
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