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Banks That Spend More on Tech Make Better Loans: IMF

Banks with bigger information technology budgets fared better during the global financial crisis, according to a new working paper from the International Monetary Fund. So reports Quartz.

Economists Nicola Pierri and Yannick Timmer looked at the ratio of personal computers to employees at bank branches and compared that with the performance of mortgages that were sold to Freddie Mac.

By 2010, in the depths of the credit crunch, banks in the top 25% by this measure of IT adoption had about half of the problem loans of banks in the bottom 25% of IT adoption. Loan performance had been similar regardless of IT spending prior to the 2008 crisis.

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