The Future of Lending in an Alternate Universe

Experts believe this might be a more prudent alternative. For instance, look at the events that preceded the US financial crisis. Big banks start doling out large amounts of money to prospective home buyers. Soon enough, they are dispersing loans to people with no real credit history. At this moment, they are forced to account for future losses arising out of potential defaults. So in effect, you are provisioning based on future expectation.