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Credit Risk Management Workshop
3 days of focused workshop training for the best credit risk management market practices
Credit Risk as the major risk in banking business arises because of customer failure to meet his obligations in accordance with the agreed terms and conditions. This kind of risk can affect bank’s earnings and capital.
Whether you work as bank’s front office or back office, work as external auditor, you are beginners in your banking career, or you are student and will soon start your career in banking system, having this skill will provide you competitive advantage in what you want to do as banker.
This course will first recall all kinds of financial risks faced with banking business, and then will focus on credit risk in more details. By the end of this course, you will have complete knowledge of techniques to identify the risks, how to assess credit risk by use of credit risk models for individual customers, corporate entities, and credit portfolio in general.
Interactive lessons and analytical tools
Relevant and up-to-date content
Pre- course diagnostic test
Reference and support materials
At the end of the course, the trainee will:
Recall an understanding of different risks in banking environment,
Be able to efficiently and professionally control and manage the risks using different techniques,
Gain the self-confidence for reporting credit risks to the top managers,
Who Should Attend?
External and Internal Auditors,
Anyone who wants to learn the credit risk concepts and risk modeling techniques,
Graduate and undergraduate students in business, finance, accounting, banking and the other related disciplines who want to join banking sector.
Day 1-Risks faced in Banking Sector, Risk Identification,
What are the reasons for risks in banking industry?
Risks faced by banks,
Credit Risk and why is it important for a bank?
Risks associated with lending activities,
Credit culture and risk profile,
How the credit crunch and its origins has affected our approach to credit risk?
Definitions of default,
Merton’s enterprise model and default risk.
Default probability recovery rates, LGD and exposure at default
Impact of credit risk on the bank’s balance sheet, income statement, cash flow statements, and equity prices
Ratings agents approach to credit risk
Lessons to be learned from the credit crunch
Day 2- Credit Risk Analysis and Modeling, Risk Assessment
What information is required for credit risk analysis?
Credit risk assessment tools.
Customer risk assessment (LGD, EAD, PD, EL and UL concepts) versus credit portfolio risk assessment,
Modern approach to assessing credit risk,
Portfolio risk and return,
Probability of default, rating models
loss given default
Exposure at default
correlation of default
Credit risk on portfolio level vs single transaction
Loss distributions and relationship to expected loss, worst credit loss, economic and regulatory capital definitions.
Computer Workshop Spreadsheet exercises for simple portfolio credit model
Introduction to portfolio credit risk models; CreditRisk+, CreditMetrics,