Credit Risk for Financial Firms Course

Credit risk is a form of financial risk. For most financial firms, loans - including mortgages, credit cards, personal loans and corporate loans - are the primary source of credit risk.

Some credit risk takes the form of counterparty credit risk. This is the risk that arises from the possibility that the counterparty defaulting on amounts owed

In our Credit Risk for Financial Firms course, you'll learn about default risk, credit risk, its key components and how to manage it.

About this Course

Available as part of our Risk Management Library.

Learning objectives

Understand what credit risk is, including its sub-types
Quantify and calculate credit risk
Recognise who manages credit risk within a company
Learn how to manage credit risk by identifying, assessing, treating, monitoring and reporting it
Recognise the importance of continual improvement for credit risk management

Course Contents

Welcome

- Learning objectives
- How to complete this course

What is credit risk?

- Types of credit risk
- You decide: True or false?
- What is default risk?
- Calculate the default risk
- The relationship between interest rates & credit risk
- Credit derivatives
- You decide: True or false?

Who manages credit risk in a company?

- You decide: Who manages credit risk?

What kinds of rules do financial services regulators write about credit risk?

- In the news: Credit risk

The Management of Risk (MoR) framework

Identifying credit risk

- Scenario: The business loan

Assessing Credit Risk

Short-term solvency ratios

- Scenario: Background checks using short-term solvency ratios

Capitalisation ratios

- Scenario: Background checks using capitalisation ratios

Coverage ratios

- Scenario: Background checks using coverage ratios

Assessing the ability to service debt

- Scenario: Assessing the ability to service debt

Determining credit risk appetite

- You decide: Engaging with credit risk appetite

Treating credit risk

- Credit risk controls
- You decide: Credit risk controls

Credit risk monitoring

- Scenario: Credit risk monitoring

Credit risk reporting

- Deeper dive: Credit risk reports
- You decide: Credit risk reporting

Continual improvement of credit risk

- Scenario 1: Rising inflation
- Scenario 2: The bankruptcy

Your responsibility

Summary

Affirmation

Assessment

Course Specifications

Structure

Approximately 40-minute long e-learning course followed by a 10-question assessment.

Audience

Suitable for all staff - examples and interactivities designed for staff at all levels. No previous knowledge or experience is required.

Design

SHARD-compliant, responsive display on all devices, accessibility on screen readers, visual design controlled via a client style sheet.

Compatibility

All Windows, Mac OSX, iOS, Android (Flash-free for mobile compatibility). AICC and SCORM 1.2-compliant, suitable for both hosted and deployed SCORM or AICC.