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FINANCIAL MARKET COURSES

Credit Risk Appetite – An Introduction

Credit risk appetite is the level of risk that a bank is prepared to accept to achieve its objectives. It is important for banks to set risk appetite at an appropriate level to ensure credit risks are only accepted and managed within that appetite. Appetite must be reviewed and reset in light of changing market conditions and portfolio performance. This course describes the importance of setting credit risk appetite, the various measures of risk appetite, and the impact of risk appetite on credit decisions.

 

The financial crisis highlighted the importance of understanding and managing concentration risks. Frameworks for identifying and managing concentration risks have been refocused due to the events of the financial crisis. This course outlines the key concentration risks faced by banks.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Recognize the importance of credit risk appetite for banking organizations

    Determine how banks can identify and manage concentration risks

  • COURSE OUTLINE

    Topic 1: Overview of Credit Risk Appetite

    What is Credit Risk Appetite?

    Risk Capacity

    Setting Credit Risk Appetite

    o Quantitative Inputs

    o Qualitative Inputs

    Credit Risk Appetite Measures

    Credit Risk Decision Making & Appetite

    Monitoring & Updating Credit Risk Appetite

    Topic 2: Concentration Risk

    Overview of Concentration Risk

    Types of Concentration Risk

    o Customers

    o Industries

    o Products

    o Countries

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    60 Minutes

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