Aspects of credit risk management

The following aspects of credit risk management make it a complex and challenging area of specialization.

Basel and regulatory authority guidelines

Earlier, we learned about the Basel norms. We have three versions of the Basel norms, but many more deliberations, consulting papers, and clarifications from the Basel Committee. There is already a Basel IV being spoken about, although there is no such formal name assigned to the extensions of certain aspects of Basel III that are currently being discussed by the Basel Committee.

In the case of the Eurozone and United Kingdom, the European Central Bank (ECB) and the Prudential Regulatory Authority (PRA) provide sign-offs for the advanced modeling...