BFM: Concepts and Practice · Part B: Risk Management

Chapter 12: Credit risk

How banks measure, price, limit and watch the risk that borrowers do not pay, and the capital it needs.

Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.

In this chapter

• 12.1What credit risk isp. 167
• 12.2Expected and unexpected lossp. 168
• 12.3Ratingsp. 169
• 12.4Capital for credit riskp. 170
• 12.5Credit risk mitigationp. 171
• 12.6Concentration and the portfoliop. 172
• 12.7Monitoring and reviewp. 173
• Exam traps and quick checksp. 174
• Practice: 16 questions in three roundsp. 175
• Answers, with every wrong option explainedp. 177
• Make it stickp. 179
• Chapter 12 on one pagep. 180

Corrections and updates

None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.