Published in November 2007 on the World Issues website, this article looked at whether one of the contributors to the failure of the US Subprime Mortgage market may have been changes in computerised debt-monitoring systems.
Currently, markets around the world are highly-volatile due to the fallout from the subprime mortgage debacle in the States. Not only is there little information yet released into the public domain regarding the relative financial exposure of major banks around the world, but within those banks there is clearly some consternation regarding how it all happened in the first place. As a result there is uncertainty, not only with regard to whether some banks may be seriously exposed, but also, if the reasons are not fully-understood, whether there are more problems waiting in the wings for the banking industry.
Like all private investors, I use investment websites in the never-ending search for that piece of priceless information that may just provide the opportunity of a lifetime. As a result, I receive endless regular e-mails touting all manner of theories. Most of these can be dismissed simply by reading the title, almost all of the rest before reaching the end of the first paragraph. But occasionally one survives these tests, and provides potential clues to the unravelling of a mystery. So when an article entitled “The Secret Way Banks Keep Tabs on You” arrived, the title was intriguing enough to have a look. The article is about a new service introduced into the UK recently by a leading credit reference agency. The service, known as Risk Triggers’, provides a daily monitoring facility that allows lenders, such as banks and credit card companies, to be provided with information of judgments and late payments by borrowers, within 24 hours of them being noted on an individual’s file. According to the agency’s website, this service enables lenders to “manage potential delinquencies in the earliest stages”. Read the full article