| The demonstrable fact of the Canadian and | | | | hopes that the loans and lines of credit he |
| therefore the BC mortgage market is that | | | | authorized will perform otherwise his head is on |
| lenders are reigning in. I am reminded by a | | | | the block. He must lend money and the contracts |
| conversation I had with an HR Director of a | | | | must perform. Hanging over his head as he |
| major Canadian bank. We were discussing how | | | | reclines in his cushy chair is a sword hanging on a |
| bankers were assessed i.e. hired and fired. | | | | thread. |
| Bankers are assessed on both their loan | | | | The fear of making a bad underwriting decision is |
| performance and their internal political capabilities. | | | | slowing the process. It is easier to say no to an |
| The situation for bankers is unique to this | | | | application then to take the risk. The banker is |
| generation. There is the quiet little $75 billion bank | | | | finding he has enough risk with the fair weather |
| bailout now taking place in Canada. Plunging | | | | financing he advanced in the past few years. And |
| consumer spending; the loss of almost 150,000 | | | | now the weather is closing in. Will he, can he |
| full-time jobs in the last 60 days; the crash in | | | | survive his next review. Today, stepping into the |
| commodity prices; collapsing corporate profits | | | | banker's office requires more then a forced smile |
| especially the banks, the bankruptcy of Nortel, | | | | and a clean shirt. If you are looking for money, |
| diving home equity and a deterioration of national | | | | you will need to ensure that the i's are dotted and |
| finances all of these are without precedent since | | | | the t's are crossed...in other words get all of your |
| the depression. | | | | ducks in a row. The current environment means, |
| Into this financial environment, a banker must lend. | | | | while you may be at your schmoozing best, the |
| Sitting in his ergonomic leather chair within his well | | | | banker is looking to see if this deal will hurt him. |
| appointed office he must debate the personal | | | | Soft docs, managing income for taxes need not |
| consequences of making the loan or denying it. He | | | | apply. You see, the banker has the auditors |
| is facing pressure from senior management to | | | | looking over his shoulder for any exceptions to |
| increase the interest rate on loans and mortgages | | | | the underwriting guidelines. Pity the poor banker. |
| to offset the losses from bad investments. He | | | | Old fashioned guidelines are coming back in vogue. |
| must face the business people whose favor he | | | | However with the return to old fashioned banking, |
| curried in good times with the admonition that | | | | the self employed and small businesses will find it |
| they would have a relationship with the bank. Now | | | | increasing difficult to find money. |
| he must say no to their requests for money. He | | | | |