19th May, 2019Mike Coates

GBRW Contributes to NPL Management Workshop in Inner Mongolia

In 2018, the International Finance Corporation (IFC), the World Bank Group organized a Workshop on NPL Management for Lending Institutions in Hohhot, Inner Mongolia China. The Workshop, which was attended by more than 200 Regulators and Lenders, was hosted by the Bank of Inner Mongolia (BOIM).

The workshop brought together commercial banking, investment banking and asset management professionals, as well as regulators, lawyers, consultants, and scholars to share their experiences and encourage the use of best practices with the workshop participants.

Nate Dickerson, representing GBRW was asked to address the topic: The Role of the Regulators in Non-performing Loan Management.

During his presentation Nate discussed:

  • The importance of defining problem loans in a manner the facilitates early detection, as well as the importance of early detection;
  • The importance of understanding that growth and/or economic expansion creates/generate problem loans, not economic contraction;
  • Economic contraction simply makes apparent the problems festering during the growth or good times;
  • The importance of understanding that risk generally underestimated during boom times and incentive structures that rewards short-term performance exacerbates the situation;
  • The importance of understanding that financial institutions’ ability to monitor and manage risk during boom times is low, and less during bad times;
  • That borrowers, lenders and regulators should strive to eliminate institutional blind spots; and
  • The Importance role that SMEs play with regards to economic development and employment.