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What does 'imprudent' here mean ? Does it mean unwise or careless thinking? Up to a fifth of all bank loans are said to be non-performing and several banks are bust, not least because the government instructed them to lend even when they thought it imprudent. Source: http://www.economist.com/news/middle-east-and-africa/21688899-economy-has-great-potential-will-it-be-realised-waiting-peace
Jan 26, 2016 4:51 PM
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not wise
January 26, 2016
"Prudence" is a principle in accounting and finance. It means "acting with due care". In concrete terms, here it means doing proper credit analysis before you lend. "Imprudent to lend" here means "the results of the credit analysis show that the bank should not lend money to the applicant; the possibility of deliquency and default is high." It would be reckless to lend. It is not wrong to say "unwise" or "careless", but you should try to learn the more sophisticated explanation above.
January 26, 2016
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