Certified Credit Risk Management Professional

The credit risk management definition has widened given the growing number of risks / financial institutions, Sovereign Wealth Funds &  banks must manage and the importance of risk management policy has increased.

However, mitigating losses associated with the non-payment of loans made to businesses and people is a primary responsibility.

Credit risk management can be summed up as how a bank and other lenders measures, manages and monitors its exposures to achieve the desired return on its capital. Credit risk managers are tasked with making decisions that impact the composition and performance of the loan portfolio.

Benefits:

• More confident in dealing with colleagues and associates in the risk field
• Gain new approaches to minimizing credit risk
• Learn how to accurately spot and measure credit risk exposures to third parties
• Key concepts in credit risk and the range that makes up the risk spectrum.
• Risk Identification, risk weight and measurement – credit risk ratings and financial statement 6.analysis, including key accounting concepts and commonly used financial ratios
• How credit risk is monitored and controlled – the role of documentation and collateral in the risk equation
• Cash flow lending approaches – when collateral is short or unavailable
• Issues in the identification and management of troublesome loans

Contents:

• Risks faced in Banking Sector, Risk Identification,
• What are the reasons for risks in the 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,
• 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
• Rating agents approach to credit risk
• Lessons to be learned from the credit crunch
• Credit Risk Analysis and Modeling, Risk Assessment
• What information is required for credit risk analysis?
• Credit risk assessment tools.
• Customer risk assessment versus credit portfolio risk assessment,
• The 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 a simple portfolio credit model
• Introduction to portfolio credit risk models; CreditRisk+, CreditMetrics,
• Optimizing portfolios for best risk/return
• Tail risk
• Controlling Credit Risk, Risk Mitigation
• Loan policy issues,
• Strategic planning for the loan portfolio,
• Loan portfolio objectives,
• Structured finance, Financial Covenants, Collateralization, Syndication, Limitation.
• Securitization and Risk Transformation,
• Techniques for moving risk off-balance sheet, CDOs and other tranche products
• Pros and cons of securitization for origination firms and investors,
• The role of rating agencies
• Credit Risk Reporting, Risk Monitoring
• Risk Asset Review Reports,
• Early warning systems,
• Capture asset quality migrations,
• Trigger Actions (i.e. planning credit enhancement, reduction in exposures, exit strategy).
• Stress Testing
• Credit Risk-Based Calculations
• Risk-based pricing,
• Risk-based provisioning and capital requirements.
• Regulatory capital under Basel I
• Regulatory capital under Basel II
• Changes under Basel III
• Standardized approach
• Foundation internal ratings-based approach