Loan Pricing: A Pricing Approach Based on Risk (Manuscripts)
Academy of Accounting and Financial Studies Journal 2001, May, 5, 2
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Publisher Description
ABSTRACT Loan pricing is one of the most critical decisions facing financial institution managers. Competition has forced management to continuously review loan pricing with a "sharper pencil" in light of stiffer competition for a share of the available loan pool. If the institution is to be successful and ensure continued profitable existence, there must be a balance between loan loss control and pricing to generate profitability. This study looks at the loan pricing dilemma from a risk management perspective that minimizes the number of calculations required to arrive at the risk factor.
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