Daily News: October 22, 2012

PayNet: Lenders to Face Rising Risk Costs in 2013


PayNet reported that for the first time since 2009, default risk is forecast to rise by 10% in 2013 increasing cost on the P&L and impacting the bottom line.

According to PayNet, with the abnormally low cost of risk to-date, the potential for higher credit losses presents uncertainty on a CEO’s Profit & Loss statement. The economic indicators are tough to put into business plans: annual inflation is at 1.69%, 30-year U.S. Treasury bonds are at 2.85% and inflation adjusted real return is 1.16%, which are unusually low. These conditions leave little room for error at a time when CEO