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Unit 5: Credit Risk Analytics - Coggle Diagram
Unit 5: Credit Risk Analytics
Purpose
Achieving lenders' goals
Holistic cost-benefit analysis
Estimating risk cost
Expanding credit portfolio
Tailored credit conditions
Mitigating portfolio risks
Strategic lending decisions
Credit Problems
Concentration risk: Capital depletion
Credit process errors: Mistakes lead to problems
Market and liquidity exposures: Volatility and access issues
Credit score:
Financial standing indicator
Lender assessment tool
Predicts loan repayment
Analysis Models
Assessing default probability
Key to lending decisions
Evolving with technology
Types
Credit default risk
Concentration risk
Country risk
Factors affecting CR Modeling
Probability of Default (POD)
Loss Given Default (LGD)
Exposure at Default (EAD)