Credit risk management
After the three day simulation the participants will be able to recognize the importance of Economic Capital, calculate and use financial ratios and ratings, evaluate covenants and collateral, and assess - and take - credit risk.
The simulation gives the participants an opportunity to practically experience the challenges of making decisions based on Return on Economic Capital and managing a credit portfolio in a competitive and dynamic environment.
The participants will be divided into groups, each representing the credit risk department of a bank. Each group sets its own risk strategy, organizes its work and uses credit risk tools to make decisions with regard to credit proposals and credit portfolio management. The Credit Risk Simulation takes place in a competitive environment where Return on Economic Capital is the main measurement of success.
The teams learn to understand and adopt their strategies and credit portfolios to changing risks due to the developments of individual companies and industries, geography and maturity issues, as well as impact of news flow and ethical questions. All the elements of a real credit decision environment are available.
Key issues covered
- Return on Economic Capital
- Risk assessment and rating
- Risk process and limits
- Pricing, covenants and collateral
- Loan products and exit possibilities
- Credit portfolio management
