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FINANCIAL MARKET COURSES

Credit Risk Mitigation – Management & Realization

This course looks at the key stages involved in effectively managing mitigants taken in support of a loan or other credit facility. It begins by outlining the assessment and approval stages of proposed mitigation, and the differences between disclosed and undisclosed mitigation. The importance of legal certainty and enforceability of mitigation is explained, as are the capital eligibility requirements under the Basel framework. Subsequent topics describe the key requirements in relation to CRM both before and after drawdown of credit facilities, as well as the process of actually realizing mitigation when necessary to do so.

  • OBJECTIVES

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

    • Outline the key stages involved in effectively managing credit risk mitigation (CRM)

    • Describe the key requirements in relation to CRM prior to drawdown of credit facilities as well as post-drawdown

    • Describe the process for realizing both funded and unfunded mitigation

  • COURSE OUTLINE

    Topic 1: Overview of Mitigation Management

    Mitigation & The Credit Risk Lifecycle

    o Assessment & Approval

    o Pre-Drawdown o Post-Drawdown

    o Realization

    o Assessment & Approval

    Disclosed vs. Undisclosed Mitigation

    Legal Certainty & Enforceability

    Capital Eligibility

    Topic 2: Pre- & Post-Drawdown Requirements

    Pre-Drawdown Requirements

    o Overview

    • Documentation of Credit Facilities

    • Legal Documentation

    • Registrations

    o Role of Documentation Unit

    o Documentation of Claims on Third Parties

    o Initial Valuations

    • Valuers

    Post-Drawdown Requirements

    o Monitoring

    o Revaluation

    Topic 3: Realizing Mitigation

    Factors Affecting Realization

    Realizing Funded Mitigation

    o Taking Possession

    o Liquidation

    • Cost-Benefit Analysis

    Realizing Unfunded Mitigation

    Lessons Learned

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    60 Minutes

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