BoE paper analyses banks’ forecasting accuracy
Banks with better governance, including more senior women, make better predictions, authors find
Commercial banks’ forecast accuracy matters for their profitability and stability, but many firms make costly “errors of optimism”, researchers at the Bank of England find.
Authors Joel Suss and Adam Hughes note there has been little previous research into bank expectations. They aim to fill this gap by using regulatory data to assess bank forecasts of net profit, capital and loan impairments. The data covers all regulated banks and building societies in the UK from 2008 to the present.
In the
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