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After completing this reading you should be able to:
- Define credit risk and explain how it arises using examples.
- Explain the components of credit risk evaluation.
- Describe, compare and contrast various credit risk mitigants and their role in credit analysis.
- Compare and contrast quantitative and qualitative techniques of credit risk evaluation.
- Compare the credit analysis of consumers, corporations, financial institutions, and sovereigns.
- Describe quantitative measurements and factors of credit risk, including probability of default, loss given default, exposure at default, expected loss, and time horizon.
- Compare bank failure and bank insolvency.
0:00 Introduction
1:59 Learning Objectives
2:34 What's Credit?
4:17 Credit Risk for Banks
6:42 Components of Credit Risk Evaluation (1/2)
11:51 Quantitative vs. Qualitative Credit Risk Evaluation
15:56 Consumer Credit Analysis
18:25 Corporate Credit Analysis
21:01 Financial Institution Credit Analysis
22:58 Sovereign/Municipal Credit Analysis
23:46 Probability of Default (PD)
25:05 Loss Given Default (LGD)
26:03 Exposure at Default (EAD)
26:50 Time Horizon
28:01 Bank Insolvency vs. Bank Failure
