Credit Risk Management

I am very glad that you have chosen to attend this course, your Course, our Course.

The aim of this week is to introduce the first concepts of the course.
For some students, this week could be a repetition of something they already know; but you will see that the complexity of the course will increase gradually, in order to give everyone the opportunity to learn the basics of credit risk management (check the course syllabus for more details).
Moreover, according to an old Latin saying: Repetita iuvant (repetitions help in better understanding).

IMPORTANT: if you are not familiar with risk management, do not be scared. Allow yourself the time to familiarize with these new topics. Many definitions and acronyms will be new for you, but during the course they will become clearer and clearer.
In this week I will cite the Value-at-Risk, the RWA, and other quantities that we will study together in Weeks 2 and 3. Try to look at the big picture, at the general ideas. Details will come in due time.

Today, we will start by defining what credit risk is, and this makes totally sense. Before dealing with the management of credit risk, we need to know what we are speaking about.

We will see that credit risk, a very pervasive risk in our societies, consists of different elements.

In a second phase, we will contextualize credit risk within the Basel Accords framework, a set of international standards for bank regulations (but with a strong influence on international companies as well). This is necessary to develop the right approach to credit risk.

It is finally time to start...