Global banks implement various measures to ensure responsible lending practices and prevent financial crises, recognizing their pivotal role in maintaining stability within the financial system. One fundamental aspect is conducting thorough risk assessments before extending credit to borrowers. Banks analyze borrowers' creditworthiness, assess their ability to repay loans, and consider factors such as income stability, debt levels, and collateral.

Additionally, global banks adhere to regulatory frameworks established by national and international authorities. These regulations set standards for capital adequacy, liquidity management, and risk management practices to mitigate systemic risks and safeguard against excessive leverage.

Risk management is another critical component, where banks employ sophisticated models and analytics to identify, measure, and monitor risks associated with lending activities. Stress testing scenarios are often utilized to evaluate the resilience of banks' balance sheets under adverse economic conditions.

Furthermore, global banks engage in prudent lending practices by diversifying their loan portfolios across different sectors, geographic regions, and types of borrowers. This diversification helps mitigate concentration risks and reduces the impact of localized economic downturns.

Education and transparency initiatives are also employed to ensure borrowers understand the terms and risks associated with loans. Providing clear information empowers borrowers to make informed decisions and reduces the likelihood of defaults.

Overall, by implementing these measures, global banks aim to foster a stable lending environment, mitigate systemic risks, and contribute to sustainable economic growth while avoiding the pitfalls that can lead to financial crises.