The Three Questions.
What is every credit decision actually deciding?
ONE OF EIGHT · FROM HOW BANKERS THINK · FREE · NO SIGNUP
// THE SHORT ANSWER
The Three Questions are the whole of commercial banking judgment stated before any technique is reached for: will I get paid back, am I being paid enough for the risk, and can I get out if I am wrong. They are the working form of the one question underneath every banking decision — how do I get my money back, with interest, across cycles. Every other framework in the book is one of the three applied to a particular kind of moment: a working capital request, a set of financial statements, an industry, a deal to decline. Senior bankers do not run them in sequence; after enough years the three fuse into a single read, and that fused read is what the book means by temperament.
// THE PARTS
- 01Will I get paid back? — Credit. Cash flows, assets, business model, resilience across cycles.
- 02Am I being paid enough for the risk? — Pricing and structure. Whether the spread compensates for the downside the structure cannot price.
- 03Can I get out if I'm wrong? — Exit. Covenants, secondary markets, alternative lenders, structural exits.
// WHERE IT SITS
Every framework in the book is a structured way of answering one question — “How do I get my money back, with interest, across cycles?” — through the three questions beneath it. This one serves:
- QUESTION 01 · CREDITWill I get paid back?Cash flows, assets, business model, resilience across cycles.
- QUESTION 02 · PRICING AND STRUCTUREAm I being paid enough for the risk?Whether the spread compensates for the downside the structure cannot price.
- QUESTION 03 · EXITCan I get out if I'm wrong?Covenants, secondary markets, alternative lenders, structural exits.
The framework is developed in chapter 1 of How Bankers Think, Why Bankers Think Differently. The short form is in the glossary; the architecture all eight hang from is on the frameworks page.
// WORKED IN
Where this site runs the framework on a file, free and without signup.
// THE OTHER SEVEN
This page is the working form. Chapter 1 is where the framework is developed — where it came from, where it breaks, what a senior banker does when it does, and the cases that turn it from checklist into instinct.