Introduction to Credit Analysis Professional Certificate
Gain a solid grounding in credit risk evaluation using the tools, techniques and methodologies used by Rating Agencies, Regulators, Banks and Investment Banks. This course includes the instructor’s book, Introduction to Credit Analysis which is used as a reference.
Half the course is spent outlining and clarifying the different credit risk analysis methodologies used by Rating Agencies, Regulators, Banks and Investment Banks. The other half is spent in group work applying these methodologies to current Corporate, Bank and Investment Bank annual reports and 10K’s.
Apply these different structured approaches to assess the creditworthiness of:
- A corporate borrower from a rating agency perspective
- A bank from a regulator’s perspective
- A bank from a shareholder’s perspective
- An investment bank from a market perspective
Prerequisite knowledge:
- Basic accounting
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Rating Agency Corporate Rating Methodologies – Business Risk
- Introduction
- The Great Recession of 2008-2009
- Corporate Credit Standards
- Business Risk
- Industry Risk
- Competitive Position
- - Management
- Parent/Subsidiary Links
- Country Risk
- Group Work
- Evaluating Corporate Case Business Risk
Rating Agency Corporate Rating Methodologies - Financial Risk
- Financial Policy
- Profitability
- Cash Flow
- Capital Structure
- Flexibility/Liquidity
- Non-investment Grade Credit
- Sovereign Risk & Country Risk
- Group Work
- Evaluating Corporate Case Financial Risk and Overall Corporate
- Credit Default Risk
Regulatory Rating Methodology
- Background
- Types of Risks
- Integrated View of Risk Management
- Risk Management Systems
- Internal Rating Systems
- History of Basel I and Basel II Capital Accords
- Basel III
- - General Capital Requirements
- - Capital Conservation Buffer Requirements
- - Countercyclical Capital Buffer Requirements
- - Significant Financial Institution Capital Buffer Requirements
- - Liquidity Risk Requirements
- - Legal Structural Requirements
- -- Basel III Historical Studies
- Group Work
- - Evaluating Regulatory Case and overall Systemically Important
- -- Financial Institution Credit Liquidation Risk
Bank Rating Methodology
- Management’s Perspective
- - Economic Capital Management (RAROC)
- - Risk Mitigation Techniques
- - Credit Metrics
- Business Risk
- - Economic Risk
- - Industry Risk
- - Market Position
- -- Diversification
- - Management
- Financial Risk
- - Credit Risk
- -Earnings
- - Liquidity & Funding
- - Market Risk
- - Capitalization
- - Financial Flexibility
- Group Work
- - Evaluating Bank Case and overall Bank Credit Expected Loss Risk
Investment Bank Rating Methodology
- Background on Derivatives
- Benefits of Derivatives
- Derivatives Credit Exposure
- Derivative Market Exposure
- Risk Equivalents
- Credit Derivatives
- Value-at-Risk
- A comparison of rating agency, regulator, bank and investment bank views of Credit Risk
- Group Work
- - Evaluating Investment Bank Case and overall Investment Bank Credit Market Risk
- Conclusion