Milbank Global Project, Energy and Infrastructure Finance Partner Allan Marks was recently quoted in a Dealreporter article titled “Banks Boost Deal Testing Amid Pandemic, Sources Say.” The article discusses how internal risk management and approval procedures at major financial institutions are evolving to meet the challenges of the economic crisis caused by the coronavirus pandemic.
Mr. Marks notes, “As the coronavirus crisis initially swept the world, financial institutions found themselves in the position of re-evaluating proposals to provide leverage. There was the question of: have the fundamental assumptions on these deals changed?” In addition, the article discusses the importance of managing risk in the current environment. “To me, the biggest tool an investor or lender can have is to distinguish clearly between risk and uncertainty,” Mr. Marks said. “Risk is something I can quantify, I can model it. Uncertainty is different. It cannot be modeled, and usually when faced with that, people will sit tight and wait until they have better information.”