Aggressive lending practices contributed to the 2008 Financial Crisis, largely because credit analysis was not the basis for issuing loans. Nowadays, commercial banks are more risk averse and focus on traditional and modern sources to assess a borrower's credit worthiness before issuing a loan.
Key learning objectives:
Explain how lending practices impacted the 2008 Financial Crisis
Describe the aim of commercial banks in regards to lending
Outline the sources used to assess a potential borrower