WHAT'S NEW?

FINANCIAL MARKET COURSES

Credit Risks - Types

Banks must have appropriate risk management frameworks and personnel in place to deal with many different types of credit risk. This course describes these different risk types and the characteristics that determine whether a particular credit risk falls into one risk type or another. It goes beyond the credit risks that arise in the traditional banking book to examine those that arise in the trading book and the regulatory and risk management implications of this distinction. The course also describes in detail how banks segment different customer types and why this differentiation matters from a credit risk point of view.

  • OBJECTIVES

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

    Distinguish between the different types of credit risk, including the difference between direct and contingent credit risks as well as those that arise from settlement, trading, and underwriting activities

    Recognize the different credit risk customer types and the importance of differentiating between these customer types

    Identify how credit risk arises in both the banking book and the trading book and the significance of this distinction

  • COURSE OUTLINE

    Topic 1: Types of Credit Risk

    What is a Credit Risk Type?

    Not All Credit Risks are the Same

    Direct Credit Risks

    Contingent Credit Risks

    Direct vs. Contingent Risks

    Settlement Risk

    o The Herstatt Case

    o Mitigation

    Trading Risk

    Underwriting Risk

    Topic 2: Credit Risk Lifecycle

    Why Differentiate Customer Types?

    o Business Viewpoint

    o Risk Management Viewpoint

    Corporates

    o Multinational Corporations (MNCs) &

    o Large Domestic Corporations

    o Mid-Sized Corporates

    o Small & Medium Enterprises (SMEs)

    Financial Institutions (FIs) & Nonbank FIs

    Sovereigns

    Individuals

    Topic 3: Banking vs. Trading Book Risk

    Banking & Trading Books

    Regulatory Treatment

    o Marking-to-Market

    o Risk Measurement

    Lessons from the Financial Crisis

    o Banking/Trading Book Boundary

    o Liquidity Assumptions

    o Weaknesses in Risk Measurement

    Regulatory & Risk Management Changes

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

Next Course

VIEW COURSE

INTRODUCTORY

Support

Accreditations

General: info@intuition.com

Accounts: ar@intuition.com

http://support.intuition.com

Intuition engages with over 30 accreditation bodies to ensure Know-How can be used for CPE credits. If your organization needs CPE from a body not listed below, contact us and we will endeavour to have them included.

© Copyright 2016 by Intuition. All Rights Reserved.