Individual Assignment 3 Questions and Answers 2023

Better Data Brings Renewal at the Bank of England 1) What internal and/or external factors drove the initiatives at each company? Were these initiatives put in place as responses to challenges or to opportunities? a) The Bank of England was using “microeconomic data to form a detailed picture of the UK’s housing market” (Fitzgerald). The datasets that were being used by the bank gave them the ability to compare the housing market behavior to lenders risk for financial health. UK had a market crisis five years prior to the bank decision to utilize these datasets. The initiatives was put in place as an opportunity to help address “overall indebtedness… the high loan-to-income ratios” (Fitzgerald) The Bank noted that the number of loans being issued were increasing. “The Bank recommended that lenders limit the loans as well as require stress tests for individual borrowers.” (Fitzgerald) The idea of a stress test seems beneficial to the lenders because it will give them an evaluation on whether the borrower is in a goo