Stakeholder-defined corporate responsibility for a pre-credit-crunch financial service company: lessons for how good reputations are won and lost

This paper presents a study that identifies a stakeholder-defined concept of Corporate Responsibility (CR) in the context of a UK financial service organisation in the immediate pre-credit crunch era. From qualitative analysis of interviews and focus groups with employees and customers, we identify, in a wide-ranging stakeholder-defined concept of CR, six themes that together imply two necessary conditions for a firm to be regarded as responsible— both corporate actions and character must be consonant with CR. This provides both empirical support for a notable, recent theoretical contribution by Godfrey (in Acad Manag Rev 30:777–798, 2005) and novel lessons for reputation management practice.

Poly-bagging predictors for classification modelling for credit scoring

Credit scoring modelling comprises one of the leading formal tools for supporting the granting of credit. Its core objective consists of the generation of a score by means of which potential clients can be listed in the order of the probability of default. A critical factor is whether a credit scoring model is accurate enough in order to provide correct classification of the client as a good or bad payer. In this context the concept of bootstraping aggregating (bagging) arises. The basic idea is to generate multiple classifiers by obtaining the predicted values from the fitted models to several replicated datasets and then combining them into a single predictive classification in order to improve the classification accuracy. In this paper we propose a new bagging-type variant procedure, which we call poly-bagging, consisting of combining predictors over a succession of resamplings. The study is derived by credit scoring modelling. The proposed poly-bagging procedure was applied to some different artificial datasets and to a real granting of credit dataset up to three successions of resamplings. We observed better classification accuracy for the two-bagged and the three-bagged models for all considered setups. These results lead to a strong indication that the poly-bagging approach may promote improvement on the modelling performance measures, while keeping a flexible and straightforward bagging-type structure easy to implement. (C) 2011 Elsevier Ltd. All rights reserved.

A cross-country study on trade credit supply and financial crisis

O objetivo deste trabalho de pesquisa é investigar a oferta de crédito comercial durante períodos de crise financeira em seis países diferentes: Brasil, França, Alemanha, Itália, Espanha e Reino Unido, foram utilizadas informações de empresas de capital aberto entre 2000 e 2011. A literatura internacional documenta que durante o pico de crises financeiras a oferta de crédito comercial aumenta pois as companhias usam o crédito comercial como substituto e/ou complemento ao crédito bancário, apesar de após o momento de pico esta oferta diminui significantemente porque as empresas enfrentam problemas de liquidez causado por escassez de crédito. Mesmo que somente existam evidências pontuais de que a oferta de crédito comercial aumentou durante a crise financeira global de 2008, o efeito pós-crise é perceptível durante a crise Europeia de 2011, pois as empresas europeias diminuíram a oferta de crédito comercial, também evidenciando que estas companhias estavam confrontando problemas de administração de liquidez. Em relação ao uso de crédito comercial como ferramenta de transmissão de capital, nenhuma evidência foi encontrada para provar sua existência em tempo de crise financeira.

Model of a game for improving integrated decisions in production management

This paper presents the results obtained with a business game whose model represents the decision making process related to two moments at an industrial company. The first refers to the project of the industrial plant, and the second to its management. The game model was conceived so the player's first decision would establish capacity and other parameters such as quantities of each product to produce, marketing expenses, research and development, quality, advertising, salaries, if purchases will be made in installments or in cash, if there will be credit sales and how many installments will be allowed and the number of workers in the assembly area. An experiment was conducted with employees of a Brazilian company. Data obtained indicate that the players have lack of contents, especially in finances. Although these results cannot be generalized, they confirm prior results with undergraduate and graduate students and they indicate the need for reinforcement in this undergraduate area. © 2012 Springer-Verlag.

South Carolina Federal Feminist Credit Union Records - Accession 106 - M45 (60)

The South Carolina Federal Feminist Credit Union Records consists of a charter, newspaper clippings, photographs, statements, minutes, correspondence, memoranda and brochures relating to the creation and early history of the Credit Union, the first of its kind in the Southeast and the tenth one established in the nation. The Credit Union dissolved on September 1, 1977.

On the impact of disproportional samples in credit scoring models: An application to a Brazilian bank data

Statistical methods have been widely employed to assess the capabilities of credit scoring classification models in order to reduce the risk of wrong decisions when granting credit facilities to clients. The predictive quality of a classification model can be evaluated based on measures such as sensitivity, specificity, predictive values, accuracy, correlation coefficients and information theoretical measures, such as relative entropy and mutual information. In this paper we analyze the performance of a naive logistic regression model (Hosmer & Lemeshow, 1989) and a logistic regression with state-dependent sample selection model (Cramer, 2004) applied to simulated data. Also, as a case study, the methodology is illustrated on a data set extracted from a Brazilian bank portfolio. Our simulation results so far revealed that there is no statistically significant difference in terms of predictive capacity between the naive logistic regression models and the logistic regression with state-dependent sample selection models. However, there is strong difference between the distributions of the estimated default probabilities from these two statistical modeling techniques, with the naive logistic regression models always underestimating such probabilities, particularly in the presence of balanced samples. (C) 2012 Elsevier Ltd. All rights reserved.

Kreditrisiken - Modellierung und Management: Ein Überblick

Zusammenfassung Die Messung und Bewertung von Kreditrisiken stellt sich aktuell als ein sehr bedeutsames (Stichworte : Basel II, Solvency II, Kreditderivate) Gebiet dar. Allerdings hat sich hierbei keine einheitliche Vorgehensweise herausgebildet, sondern es existieren eine Vielzahl unterschiedlicher Ansatzpunkte und Modelle. Aus diesem Grund wird in dem vorliegenden Überblicksaufsatz versucht, einen systematischen Überblick über Problemfelder, Modellierungsansätze und Methoden des Risikomanagements im Kontext von Kreditrisiken zu geben. Nach einer einführenden Charakterisierung von Kreditrisiken und einem Abriss über Ratingsysteme werden zunächst die vier grundlegenden Kategorien von Kreditrisikomodellen (statische Modellierung der Ausfallverteilung, Unternehmenswertmodelle, Intensitätsmodelle und ratingbasierte Modelle) erörtert. Sodann erfolgt eine Darstellung der wichtigsten Industriemodelle (Credit Risk+, KMV, Credit Metrics, Credit Portfolio View). Behandelt werden ferner die Grundzüge von Basel II und die hierbei zugrunde liegende modelltheoretische Fundierung in Form von Einfaktormodellen sowie die Bewertung von ausfallbedrohten Zinstiteln. Abschließend wird auf Kreditderivate eingegangen.

Regulation and the Management of Expectations - Rating Agencies Revisited

In the aftermath of the 2008 crisis, scholars have begun to revise their conceptions of how market participants interact. While the traditional “rationalist optic” posits market participants who are able to process decisionrelevant information and thereby transform uncertainty into quantifiable risks, the increasingly popular “sociological optic” stresses the role of uncertainty in expectation formation and social conventions for creating confidence in markets. Applications of the sociological optic to concrete regulatory problems are still limited. By subjecting both optics to the same regulatory problem—the role of credit rating agencies (CRAs) and their ratings in capital markets—this paper provides insights into whether the sociological optic offers advice to tackle concrete regulatory problems and discusses the potential of the sociological optic in complementing the rationalist optic. The empirical application suggests that the sociological optic is not only able to improve our understanding of the role of CRAs and their ratings, but also to provide solutions complementary to those posited by the rationalist optic.

Financial Aspects of Transactions with FDI: Trade Credit Provision by SMEs in China

This paper will document financial aspects of transactions, and trade credit supply behavior with FDI among small and medium-sized enterprises(SMEs) based on two original surveys, conducted in four cities in China in 2003. The survey was designed to capture the nature of inter-firm transactions, trade credit and other financial conditions. Literature on FDI mainly refers to technology transfer, employment or investment. This paper focuses on the role and significance of FDI in the supply of trade credit due to its trade credit enforcement technology. Yanagawa, Ito and Watanabe [2006] developed a model which indicates that when a seller has higher enforcement technology or a buyer has richer liquidity, both trade credit and transaction volume will be increased. In this paper, we confirmed that FDI and G contributed to the provision of trade credit and had a positive external effect on trade credit enforcement towards China’s economy. (1) Sales towards FDI customers have the power to increase the trade credit ratio,even when controlling other factors such as choice of payment instrument, competitiveness, and expost default management. This implies that FDI does provide trade credit, not only because it has superior liquidity, but because it is also superior in terms of enforcement of trade credit repayment.(2) Cash constraints of the buyer influence the decisions concerning trade credit provided by the seller, as a model in Yanagawa, et al. [2006] predicted, and this implies that strategic default is a serious concern among SMEs in China. (3) Spillover effect exists in payment enforcement technology in transactions with FDI customers.

Ex ante bargaining and ex post enforcement in trade credit supply: theory and evidence from China

If payment of goods is easily default, economic transaction may deeply suffer from the risk. This risky environment formed a mechanism that governs how economic transaction is realized, subsequently how trade credit is given. This paper distinguished ex ante bargaining and ex post enforcement, then modeled that bargaining power reduces trade credit ex ante, and ex post enforcement power and cash in hand of buyer can enhances both trade amount and trade credit in a presence of default risk. We modeled this relationship in order to organize findings from previous literature and from our original micro data on detailed transaction in China to consistently understand the mechanism governing trade credit. Then empirically tested a structure from the theoretical prediction with data. Results show that ex post enforcement power of seller mainly determines size of trade credit and trade amount, cash in hand of buyer can substitute with enforcement power; Bargaining power of seller is exercised to reduces trade credit and trade amount for avoiding default risk, but it simultaneously improves enforcement power as well. We found that ex post enforcement power consists of (ex ante) bargaining power on between two parties and intervention from the third party. However, its magnitude is far smaller than the direct impact to reduce trade credit and trade amount.

Competition of the mechanisms : how Chinese home appliance firms coped with default risk of trade credit?

During the transition period from a planned economy to a market economy in 1990s of China, there was a considerable accrual of deferred payment, and default due to inferior enforcement institutions. This is a very common phenomenon in the transition economies at that time. Interviews with home electronics appliance firms revealed that firms coped with this problem by adjusting their sales mechanisms (found four types), and the benefit of institutions was limited. A theoretical analysis claim that spot and integration are inferior to contracts, a contract with a rebate on volume and prepayment against an exclusive agent can realize the lowest cost and price. The empirical part showed that mechanisms converged into a mechanism with the rebate on volume an against exclusive agent and its price level is the lowest. The competition is the driving force of the convergence of mechanisms and improvement risk management capacity.

Towards Better Use of Credit Reporting in Europe. CEPS-ECRI Task Force Report, September 2013

This report discusses how the current EU credit reporting systems meet the demands of the different stakeholders in the credit granting and management process, and what is needed to improve these systems. As credit reporting is a tool for responsible lending and for ensuring financial inclusion of consumers, it argues that the needs of EU credit markets and consumers should be the basis for assessing the current regulation and its functionality. How a creditor assesses the risk and the creditworthiness of a customer is at the core of successful and safe crediting. Facilitating this assessment process, within the boundaries of data protection laws, is a key building block for making well-informed credit decisions.

Hearing to review proposals to amend the program crop provisions of the Farm Security and Rural Investment Act of 2002 : hearing before the Subcommittee on General Farm Commodities and Risk Management of the Committee on Agriculture, House of Representatives, One Hundred Tenth Congress, first session, April 26, 2007.

"Serial no. 110-14."