Sample interview questions: How do you assess the impact of macroeconomic factors on a borrower’s creditworthiness?
Sample answer:
Assessing the Impact of Macroeconomic Factors on Borrower’s Creditworthiness
- GDP Growth: Evaluate the borrower’s industry and location to assess the impact of economic growth on revenue and cash flow.
- Inflation: Consider how inflation affects the borrower’s input costs, pricing power, and debt repayment capacity.
- Interest Rates: Analyze the borrower’s sensitivity to changes in interest rates based on its debt structure and cash flow generation.
- Currency Fluctuations: Assess the impact of foreign exchange fluctuations on the borrower’s revenue, expenses, and debt obligations.
- Government Policies: Consider the effects of fiscal and monetary policies on the borrower’s industry, operating environment, and access to funding.
- Labor Market Conditions: Evaluate the borrower’s labor costs, availability of skilled workforce, and potential impact of labor market shifts.
- Consumer Spending: Analyze the borrower’s exposure to changes in consumer spending patterns, which can affect demand for its products or services. Read full answer