Credit Risk [38]

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Bullet points include: How credible / reliable are the outputs? Risk models provide frameworks for consistent decision-making, rather than accurate representations of reality. Potential for spurious accuracy. Uses: Portfolio-wide uses: setting capital levels. Exposure uses: may help with hedging / risk reduction strategies. Lay off exposures with high marginal contributions to risk. But bear in mind sensitivity of figures to input assumptions, which here include model specification assumptions

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