Showing papers on "Credit risk published in 1968"

The Formulation of Credit Policy Models

Abstract: This study undertakes to apply the statistical technique of sequential decision process to a specific range of problems of (trade) credit management. In particular, the study examines two problems: first, credit extension policy on a specific request or account; and second, construction of indices measuring the effectiveness of such a policy. The end goal is to establish a control system which has heretofore resisted analytical solution. Since management exercises its discretion primarily during the credit-extension phase, and since subsequent phases of credit policy are closely related to this particular phase, attention is focused on this aspect of credit policy. However, the analysis does not ignore other important aspects of credit policy, such as bad-debt level, length of the credit period, collection activities, and level of lost sales. The above situation is then reversed: indices in terms of bad-debt level, receivable level, etc., measure the impact of credit extension procedures on the subsequent...

The Regulation of Consumer Credit Insurance

Abstract: Consumer credit insurance may be classified under two broad headings: credit life insurance and credit accident and health insurance. Credit life insurance generally provides a death benefit large enough to repay the creditor the outstanding balance of the indebtedness at the time of the debtor's death. Credit accident and health insurance guarantees that the debtor's periodic payments will be met if he is incapacitated because of injury or illness. Both types of insurance may be used only in connection with credit extensions which are repayable within a specified number of years. Insurance is ordinarily obtained by the borrower at the point where the credit transaction takes place-that is, from a financial institution or a vendor. The borrower may be covered under a group policy or by an individual contract, and, in either case, the creditor is the primary beneficiary of the insurance.