C.Loans and risks

Before lending money, a bank has to assess or calculate the risk involved. Generally, the greater the risk for the bank of not being repaid, the higher the interest rate they charge. Most retail banks have standardized products for personal customers, such as personal loans. This means that all customers who have been granted a loan have the same terms and conditions - they have the same rules for paying back the money.

Banks have more complicated risk assessment methods for corporate customers - business clients - but large companies these days prefer to raise their own finance rather than borrow from banks.

Banks have to find a balance between liquidity - having cash available when depositors want it - and different maturities - dates when loans will be repaid. They also have to balance yield - how much money a loan pays - and risk.

Complete the sentences from banks’ websites. Look at A and C opposite to help you.

1. If you need instant access to all your money, this is the _______ _________for you.

2. Our products for_______ ___________include business overdrafts, loan

repayments that reflect your cash flow, and commercial mortgages.

3. Our local branch managers are encouraged to help local businesses and are authorized to __________ _______________and overdrafts.

4. We offer standardized loans: you can be sure you won’t get less favourable terms and_________than our other, __________,_________