As part of the Credit Research Centre Seminar Series, Caterina Liberati visited the Business School on 10 November to give a presentation on ‘Advances in Credit Scoring: Combining performance and interpretation in kernel discriminant analysis’.

Dr Liberati is an Assistant Professor in Statistics for Economics at the University of Milano-Bicocca, and gained her PhD in Statistical Methodology for Scientific Research from the University of Bologna. The presentation was well attended by practitioners and scholars with an interest in credit scoring, and was well received.

The Academy of Social Sciences is the national academy of academics, learned societies and practitioners in the social sciences. Its mission is to promote social science in the UK for the public benefit.

The new Fellows are drawn from academics, practitioners and policymakers across the social sciences. They have been recognised after an extensive peer review process for the excellence and impact of their work through the use of social science for public benefit.

Submission deadline: 15 January 2018

Papers are invited that make original contributions to knowledge in empirical credit risk modelling. Papers presented at the Credit Scoring and Credit Control XV conference may be submitted, but the Special Issue is open to other papers as well.

Full details and submission guidelines are included in the Call for papers.

The group also suggested a soft rather than hard Brexit and restricting lending criteria could improve financial stability.

74% of the 200 credit control specialists questioned at the Business School’s biennial Credit Risk and Credit Scoring Conference said the Bank of England was right to be concerned about increasing levels of UK consumer debt, labelling them a serious problem.

Two thirds (66%) predict another credit crunch is likely to happen by 2022 and more than a third (38%) believe a financial crisis could hit even sooner – within the next three years. The Bank of England announced in July that unsecured consumer credit has risen to £200bn for the first time since 2008.

When asked about Brexit, almost three quarters of the global finance specialists (73%) predict the UK’s departure from the EU will harm consumer and businesses’ ability to obtain credit when they need it. The majority (83%) said the Eurozone will suffer significant aftershocks from Brexit, with 42% reporting these would still be felt beyond 2020.

There is overwhelming support for a soft Brexit as a means of keeping the economy in check: 52% say soft Brexit would improve financial stability in the next 12 months compared to 6% for a hard Brexit.

Professor Jonathan Crook, Director of the Credit Research Centre at University of Edinburgh Business School, said:

"The view of our expert delegation echoes concerns that have been expressed recently by the Bank of England about lenders being complacent about consumer lending levels.

"Having been reluctant to publicly commit to rate rises, it’s unlikely we’ll see any changes this week. But reality may bite sooner than expected if lenders, concerned about a potential rise in customers defaulting, increase interest rates to help off-set the risk.

"All eyes are on Brexit negotiations at the moment as trade talks continue. Moody’s has already warned the UK could be looking at a credit downgrade if negotiations fail to get the right sort of deal. The simple truth is this situation is unprecedented and we need talks to progress further before we can better predict what will happen. For now, the global experts who gathered at the University of Edinburgh last week are clear we’ll be feeling the effects of our departure from the EU for years, perhaps decades, to come."

Should borrowing levels continue unchecked due to ultra-low rates, the vast majority of the experts (91%) expect an increase in the rate of UK consumers defaulting on repayments. 61% said tightening lending criteria would shore up financial stability over the next year.

The situation appears to be more pronounced in Britain than overseas, with UK credit experts much more concerned about how easy it is to obtain credit in their own country compared to their overseas counterparts: 46% think credit is too easily accessible compared to 26% of those from other countries.

The research was conducted at the University of Edinburgh Business School’s biennial Credit Risk and Credit Control Conference where 300 of the world’s expert practitioners and academics in credit came together to debate new research and innovations that will shape the way individuals and businesses can access, or be denied, credit in the coming months and years.

Director Jonathan Crook attended CLADAG’s (CLAssification and Data Analysis Group of the Italian Statistical Society) 2017 Conference, held 13–15 September in Milan.

During his visit he discussed recent research with CRC member Viani Djeundje 'Incorporating Heterogeneity and Macroeconomic Variables into Multi-state Delinquency Models for Credit Cards'.

The Credit Research Centre was proud to host the 15th Credit Scoring and Credit Control Conference which took place over 3 days (30 August to 1 September). The Conference was held at the John McIntyre Conference Centre, part of the University’s Pollock Halls campus.

Over the three days delegates heard plenary presentations by Charlotte Gerken (Bank of England); Mark Somers (4Most Europe); Tony van Gestel (Dexia Group) and Stefan Hunt (FCA). In addition, the full and varied programme featured talks ranging from current industry issues to the latest statistical research findings.

Delegates also had the chance to experience the social side of Edinburgh with an organised whisky tasting session or tours of the Real Mary King’s Close or the Palace of Holyroodhouse. And for the energetic, there was the chance to join two members of the organising committee on an early morning 5k run round Arthur’s Seat!

This was all topped off by the Thursday evening Conference Gala Dinner which was held in the impressive setting of the National Museum of Scotland, where delegates were wines, dined and entertained. A huge thank you to the UEBS Events Team for the great organisation ensuring everything ran smoothly.

During the 10th International Risk Management Conference, held in Florence from 12 to 14 June, Professor Crook will present his paper “Exploring the Effects of Macroeconomic Variables on Credit Card Delinquency and Default Behaviour” with Mindy Leow.

The conference will bring together leading experts from various academic disciplines and professionals for a two-and-a-half-day conference, including three keynote plenary sessions, four parallel featured sessions, a special topic session and a professional workshop.

Joining presenter Adam Shaw and making up the panel of experts along with Jonathan were Steven Finlay (Head of Analytics, Computershare Loan Services) and James Jones (Head of Consumer Affairs with the credit reference agency, Experian).