overlending
Too much credit
Overlending is the practice of extending too much credit, whether to a single borrower or across a lending portfolio.
Banks engage in overlending when they issue loans beyond what borrowers can reasonably repay, often during economic booms: The housing crisis was fueled by years of overlending to unqualified buyers.
The term implies recklessness or poor risk assessment on the lender's part.
Air-filled film sphere
- recessionProlonged economic decline
- foreclosureLender seizes mortgaged property
- bankruptcyLegal status when insolvent
- insolvencyInability to pay debts
collapse · downturn · contagion · bailout · write-off · liquidation · distress · restructuring
Under top credit tier
- underwritingRisk evaluation and acceptance
- creditRecognition or payment deferral
- loansBorrowed money arrangements
- mortgageSecured home loan
refinancing · collateral · securities · undercapitalized · overextension · liabilities · assets · creditworthiness
State of being unprotected
- recklessnessCareless disregard for danger
- imprudenceUnwise decision-making
- oversightSupervision or inadvertent omission
- misjudgmentFaulty evaluation of something
speculation · leverage · overextension · concentration · portfolio · underpricing
Criminal or neglectful behavior
- nonpaymentFailure to settle debts
- arrearsOverdue financial obligations
- repossessionCreditor seizing collateral
- forbearancePatient self-control, delayed enforcement
workout · failure · repayment · overdue · indebtedness · charge-off · impairment
Of or about currency
- fiscalOf public revenue
- policyAdopted principle of action
- reserveSupply kept back
- oversightSupervision or inadvertent omission
compliance · prudential · Basel · supervision · tightening · guidelines
bubble
Air-filled film sphere
- recessionProlonged economic decline
- foreclosureLender seizes mortgaged property
- bankruptcyLegal status when insolvent
insolvency · collapse · downturn · contagion · bailout · write-off · liquidation · distress · restructuring · receivership
subprime
Under top credit tier
- underwritingRisk evaluation and acceptance
- creditRecognition or payment deferral
- loansBorrowed money arrangements
mortgage · refinancing · collateral · securities · undercapitalized · overextension · liabilities · assets · creditworthiness · borrowers
exposure
State of being unprotected
- recklessnessCareless disregard for danger
- imprudenceUnwise decision-making
- oversightSupervision or inadvertent omission
misjudgment · speculation · leverage · overextension · concentration · portfolio · underpricing
delinquency
Criminal or neglectful behavior
- nonpaymentFailure to settle debts
- arrearsOverdue financial obligations
- repossessionCreditor seizing collateral
forbearance · workout · failure · repayment · overdue · indebtedness · charge-off · impairment
monetary
Of or about currency
oversight · compliance · prudential · Basel · supervision · tightening · guidelines
- market bubblesbubble, asset bubble, tulip mania, dot-com bubble, housing bubble