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Credit Risk: Key Concepts

Fitch Learning
Course summary
1 day
995 GBP excl. VAT
Professional Training
Next available date: 12/11/2021 - Online courses
Course Dates
Online courses
995 GBP
12/11/2021

Online courses
995 GBP
22/11/2021

Course description

Credit Risk: Key Concepts

This is a one-day introduction to everything to do with credit risk. The course defines the different types of credit risk: How to measure the amount of credit risk; the credit analysis process (which identifies whether a client can cope with the credit risk), and how regulators view the need for an equity cushion to protect depositors and other investors from a credit loss. Being a workshop, the course uses exercises and discussion to truly understand the technical details, in a realistic context.

Live Online Training

Since 2003, Fitch Learning’s industry experts have been delivering world-renowned virtual training programs to learners across the globe. Benefits include:

  • World-class video conferencing technology
  • Fully interactive, engage and network with peers using break out rooms, quizzes and polls
  • On-hand technical support team throughout
  • Attend from anywhere, across four time zones
  • Save time and costs on travel

Suitability - Who should attend?

Target Audience

This course would suit anyone with a support job in a bank, or any financial institution, or an investor. This could be a lawyer, an operations manager, marketing executives, IT developers and managers, and human resources. It would also serve a graduate well, as an introduction to banking.

Outcome / Qualification etc.

Credits: 8 CPD pts

Key Learning Outcomes:

  • Define credit risk and identify where it happens
  • Understand how it can be measured
  • Understand why banks are required to hold equity capital against losses

Training Course Content

Day One

Credit Analysis

Once we understand credit risk, how does a credit officer analyze a company to ensure it can cope with the amount and structure of debt or trading risk?

  • Overview of debt ratings: Understanding the types of and purpose of debt ratings
  • Approach and criteria applied by the rating agencies
  • Structured approach to credit analysis: Purpose, Payback, Risks and Structure
  • Types of counterparty: Corporates, financial companies, special purpose entities, and holding companies
  • Sources of payback from each type of counterparty
  • Transaction risk analysis: Categorizing and analyzing the risks
  • Components of structuring to mitigate against default

Credit Risk Mitigation

Credit risk can be reduced using mitigation techniques.

  • Structuring credit exposures – a four step approach (Exposure profile, Ranking, Safeguards and Pricing)
  • Exposure profile: Key features of the main credit products offered or traded by the bank: loans, leases, derivatives, bonds etc.
  • Ranking: Senior, pari passu and junior positions
  • The role of collateral and other forms of subordination such as structural or effective subordination
  • Safeguards: Key types of mitigation found in credit documentation and the purpose and effectiveness of each
  • Pricing: The need to be compensated for expected loss
  • Portfolio management and techniques to spread risk: Syndication, sub-participation, whole loan sales, credit derivatives, securitization

Capital Allocation

Equity capital is vital to protect depositors and other bank creditors from loss. But how much equity is needed, how is this measured, and are all equity instruments equal?

  • Recap of the purpose of capital and its importance in relation to credit risk
  • Regulatory capital (Basel II): Measuring regulatory capital for credit risk under standardized and advanced measurement approaches
  • Changes to the Basel capital framework 2011-2019, Basel 2.5 and Basel III
  • Composition of rating agency ‘Eligible capital’ and key difference from regulatory capital
  • Economic Capital: What the Economic Capital actually represents, its uses within a bank and potential issues with calculation

Why choose Fitch Learning

9 in 10 would recommend us to a colleague

Over 1,300 clients worldwide

CPD recognized

About provider

Fitch Learning

Live Online Training Since 2003, Fitch Learning’s industry experts have been delivering world-renowned virtual training programs to learners across the globe. Benefits include: World-class video conferencing technology  Fully interactive, engage and network with peers using break out rooms, quizzes and...


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Fitch Learning

17th Floor, 25 Canada Square
E14 5LQ Canary Wharf London

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Reviews

Average rating 5

Based on 1 reviews.

A.L.
"A great coverage of most essential credit risk points. It gives me a high detail insight about financial work and provides me with useful and practical methodology." A. Loupy - Calyon
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