These moves to raise selling prices are mainly due to cost-push factors stemming from the surge in raw material prices. However, such a pass-through of cost increases was barely seen when a similar price hike in raw materials occurred in past deflationary periods, like the one from 2007 to 2008.
Better, more-informed lending practices should also lead to a more-efficient allocation of scarce financial capital to the benefit of the economy at large. Greater internal transparency and quantification of risk have helped bank managers monitor portfolio performance and identify aspects of the risk-measurement and credit-granting process that begin to move off track.