Agoura Hills, Calif.-based Interthinx has released a new industry paper titled, ‘Understanding the Financial Crisis through Decomposition of Retail Lending Portfolio Performance.’
The new paper, which was produced by the Interthinx Predictive Analytics group, notes that an improved approach to forecasting and stress testing portfolios against separate origination strategies and economic factors will help lenders determine what percentage of risk is within their control and what is not. The use of time-series decomposition when analyzing retail lending portfolio performance can predict how much future loss will come from the quality of underwriting, age of loans and economic environmental impacts.
‘Understanding the development and progression of the financial crisis through the lens of time-series decomposition of retail lending portfolio performance is crucial to implementing effective regulatory requirements and management practices that may help prevent similar occurrences in the future,’ says Shane De Zilwa, director of analytics for Interthinx.
The paper is now available online.
