The Three Modes of Watching
What are the Three Modes of Watching in portfolio early warning?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
// THE SHORT ANSWER
The Three Modes of Watching are three kinds of attention held across a portfolio so that early recognition of trouble becomes a reliable output rather than occasional luck. Pattern watching holds a baseline for each borrower and notices departures from it. Coupling watching reads how one signal moves with another — the structural relationships between numbers, not the numbers alone. Silence watching attends to what stops arriving: the report that is late, the call that is not returned, the disclosure that comes through a third party. A banker who sees trouble at twelve months has options the banker who sees it at three does not.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
// IN THE BOOK
Developed in chapter 6, Spotting Trouble Before It Spots You.
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