Credit Analysis
 
  Credit Ratings
 
  Counterparty Credit Risk
 
  Credit Risk Modeling
 
  Credit Derivatives

Credit Analysis
A comprehensive e-learning product covering ratio analysis and cash flow analysis

 

The themes of this product are:

  • Assessing the financial health of a corporation
  • Implications of financial and non-financial factors on corporate credit risk
  • Methods for monitoring and standardizing credit procedures
  • Managing problem loans


Overview

Traditionally, lenders have faced credit risk in the form of default by borrowers. To this date, credit risk remains major concern for lenders worldwide. The more they know about the creditworthiness of a potential borrower, the greater the chance they can maximize profits, increase market share, minimize risk, and reduce the financial provision that must be made for bad debt. This product provides fundamental understanding of the credit risk analysis process and discusses in detail, various aspects of financial statement analysis, including ratio and cash flow analysis, among others to help in making better credit-related decisions. It also looks at various non-financial factors such as Business Plan, Industry/Sector, Top Management, etc. that could affect the creditworthiness.

After completing this course you will be conversant with the use of AS to:

  • Apply credit analysis to assess borrowers in real cases
  • Perform ratio analysis and cash flows analysis
  • Structure loan products in a competitive way
  • Identify and work-out problem loans

Target Audience
Everyone involved in the global financial services industry (as a provider, user, regulator or advisor of product/services, marketplace/exchange) would benefit from PRMIA’s innovative solutions.

  • Supervisory Agencies

    •
  • Central Banks

    •
  • Financial Institutions

    •
  • Commercial Banks

    •
  • Investment Banks

    •
  • Housing Societies/Thrifts

    •
  • Mutual Funds

    •
  • Brokerage Houses

    •
  • Stock Exchanges

    •
  • Derivatives Exchanges

    •
  • Insurance Companies

    •
  • Multinational Corporations

    •
  • Accountancy Firms

    •
  • Consultancy Firms

    •
  • Law Firms

    •
  • Rating Agencies

    •
  • Multi-lateral Financial Institutions

    •
  • Others


    •
    Course Level and Number of Courses
    Basic Level. Library of 8 Courses

    Instructional Method
    Dynamic, Interactive e-learning

    Recommended Background Familiarity with basic financial concepts

    Credit     Analysis

    Time taken to complete each Course: Two - Three hours


    1. Overview to Credit Analysis

    • Objectives
    • Credit Risk
    • Credit Analysis
    • Seven C’s
    • Credit Analysis Process

    2. Lending Process

    • Objectives
    • Introduction
    • Credit Process
    • Documentation
    • Loan Pricing and Profitability Analysis
    • Regulations

    3. Financial Statement Analysis-I

    • Objectives
    • Introduction
    • Ratio Analysis
    • Liquidity Ratios
    • Turnover Ratios
    • Profitability Ratios
    • Leverage Ratios
    • Market Ratios

    4. Financial Statement Analysis-II

    • Objectives
    • Introduction
    • Elements of Cash Flow Statement
    • Direct Method
    • Indirect Method
    • Interpreting Cash Flows

    5. Non-Financial Analysis

    • Objectives
    • Non financial analysis
    • Economy analysis
    • Industry analysis
    • Business analysis

    6. Asset Classification and Loan Loss Provisioning

    • Objectives
    • Asset Quality
    • Quantitative and Qualitative Review
    • Asset Classification
    • Special Mention Asset
    • Loan Loss Provisioning

    7. Borrowing Causes and Sources of Repayment

    • Objectives
    • Introduction
    • Operating Cycle
    • Capital Investment Cycle
    • Sources of Repayment

    8. Problem Loans

    • Objectives
    • Introduction
    • Asset Management Companies
    • Securitization of NPLs
    • Debt Restructuring
    • Preventing Problem Loans

    Job Aids

    • Benchmarking Data
    • Disclosures
    • Measurement Tools
    • Regulations
    • Global Best Practices
    • References

    Credit Ratings
    A comprehensive e-learning product covering IRB approach

     

    The themes of this product are:

    • Role of credit rating agencies
    • Rating definitions, process and methodology
    • Credit scoring models


    Overview

    Credit rating is in focus because of high profile credit problems and the New Basel – II Proposals. This product focuses on risk analysis approaches (as practiced by financial institutions internally and credit rating agencies) and comprises: Methodologies for rating credits, Factors considered for credit analysis and scoring, Calibration and validation of the arrived - at credit scores, Credit rating practices of specialized rating agencies, Basel’s internal rating –based approach to mitigate credit risk.

    After completing this course you will be conversant with the use of AS to:

    • Methodologies for rating credits
    • Factors considered for credit analysis and scoring
    • Calibration and validation of the arrived at credit scores
    • Credit rating practices of specialized rating agencies
    • Basel’s internal rating –based approach to mitigate credit risk

    Target Audience

    Everyone involved in the global financial services industry (as a provider, user, regulator or advisor of product/services, marketplace/exchange) would benefit from PRMIA’s innovative solutions.

  • Supervisory Agencies

    •
  • Central Banks

    •
  • Financial Institutions

    •
  • Commercial Banks

    •
  • Investment Banks

    •
  • Housing Societies/Thrifts

    •
  • Mutual Funds

    •
  • Brokerage Houses

    •
  • Stock Exchanges

    •
  • Derivatives Exchanges

    •
  • Insurance Companies

    •
  • Multinational Corporations

    •
  • Accountancy Firms

    •
  • Consultancy Firms

    •
  • Law Firms

    •
  • Rating Agencies

    •
  • Multi-lateral Financial Institutions

    •
  • Others


    •
    Course Level and Number of Courses
    Basic Level. Library of 3 Courses

    Instructional Method
    Dynamic, Interactive e-learning

    Recommended Background
    Familiarity with basic financial concepts

    Credit Risk: Intermediate Level

    Time taken to complete each Course: Two - Three hours


    1. Internal Rating Systems

    • Objectives
    • Architecture
    • Operating design
    • Uses of internal risk grades
    2. Internal Ratings-Based Approach
    • Objectives
    • Introduction
    • Corporate exposures
    • Other exposures

    3. External Ratings

    • Objective
    • Introduction
    • Rating Agencies
    • Rating Process
    • Credit Score

    Job Aids

    • Regulations
    • References
    • Disclosures

    Counterparty Credit Risk
    A comprehensive e-learning product covering Monte Carlo Simulation

     

    The themes of this product are:

    Mechanics and techniques for the assessment, quantification and management of the credit risk for exchange-traded and over-the-counter derivatives.


    Overview

    Expansion and globalization of financial markets, complicated derivative contracts and an array of structured products are giving rise to counterparty credit risk.

    This product focuses on the mechanics and techniques of the assessment, quantification and management of the credit risk for various derivative products and includes techniques for the mitigation of pre-settlement and settlement risk such as netting and margin and collateral requirements. We also look at the Monte Carlo simulation methods for projecting worst-case exposure at the portfolio level.

    After completing this course you will be conversant with the use of AS to:

    • Quantify credit risk in derivative products
    • Apply various techniques to mitigate credit risk
    • Calculate credit exposure using Monte Carlo simulation
    • Assimilate lessons from financial disasters (Barings Fall, Metallgesellschaft).

    Target Audience
    Everyone involved in the global financial services industry (as a provider, user, regulator or advisor of product/services, marketplace/exchange) would benefit from PRMIA’s innovative solutions.

  • Supervisory Agencies

    •
  • Central Banks

    •
  • Financial Institutions

    •
  • Commercial Banks

    •
  • Investment Banks

    •
  • Housing Societies/Thrifts

    •
  • Mutual Funds

    •
  • Brokerage Houses

    •
  • Stock Exchanges

    •
  • Derivatives Exchanges

    •
  • Insurance Companies

    •
  • Multinational Corporations

    •
  • Accountancy Firms

    •
  • Consultancy Firms

    •
  • Law Firms

    •
  • Rating Agencies

    •
  • Multi-lateral Financial Institutions

    •
  • Others
    •


    Course Level and Number of Courses
    Basic Level. Library of 9 Courses

    Instructional Method
    Dynamic, Interactive e-learning

    Recommended Background
    Familiarity with basic financial concepts


    Counterparty Credit Risk

    Time taken to complete each Course: Two - Three hours

    1. Overview to Derivative Products-I

    • Objectives
    • Introduction
    • Forward contracts
    • Futures
    • Swaps
    2. Overview to Derivative Products-II
    • Objectives
    • Introduction
    • Options
    • Option strategies-I
    • Option strategies-II

    3. Credit Exposure

    • Objectives
    • Introduction
    • Credit Exposure
    • Measuring Credit Exposure
    • Probability of Default
    • Recovery Rate

    4. Credit Risk in Derivative Products
    • Objectives
    • Introduction
    • Credit Risk in Swaps
    • Credit Risk in FRAs
    • Credit Risk in Options
    5. Pre-settlement & Settlement Risk
    • Objectives
    • Introduction
    • Pre-settlement risk
    • Settlement risk

    6. Netting – Concepts and Applications
    • Objectives
    • Introduction
    • Types of netting
    • Regulatory requirements
    • Capital treatment
    7. Margin and Collateral Requirements
    • Objectives
    • Introduction
    • Margin
    • Collateral
    • Haircut

    8. Monte Carlo Simulation
    • Objective
    • Introduction
    • Monte Carlo and Credit Risk
    9 Case Studies
    • Objectives
    • Barings Bank’s Fall
    • Metallgesellschaft
    Job Aids
    • Benchmarking Data
    • Disclosures
    • Measurement Tools
    • Regulations
    • Global Best Practices
    • References

     

    Credit Risk Modeling
    A comprehensive e-learning product covering four best-known credit risk models

     

    The themes of this product are:

    • Conceptual approaches to credit risk models
    • Comparative analysis of famous credit risk models


    Overview

    This product deals with credit risk models and management of credit risk. Credit risk models provide a framework for quantifying credit risk in portfolios of traditional credit products (loans, commitments to lend, financial letters of credit), fixed income instruments, and market-driven instruments subject to counterparty default (swaps, forwards, etc.). This product focuses on: Conceptual Approach to Credit Risk Modeling Most widely accepted credit model developed by reputed agencies such as JP Morgan, Credit Suisse First Boston, McKinsey and KMV. Managing credit risk on a portfolio level with special emphasis on active credit portfolio management approach

    After completing this course you will be conversant with the use of AS to:

    • Build loss distribution and measure expected and unexpected losses
    • Select appropriate credit risk model as per organization’s requirements
    • Understand various techniques for portfolio credit risk management

    Target Audience
    Everyone involved in the global financial services industry (as a provider, user, regulator or advisor of product/services, marketplace/exchange) would benefit from PRMIA’s innovative solutions.

  • Supervisory Agencies

    •
  • Central Banks

    •
  • Financial Institutions

    •
  • Commercial Banks

    •
  • Investment Banks

    •
  • Housing Societies/Thrifts

    •
  • Mutual Funds

    •
  • Brokerage Houses

    •
  • Stock Exchanges

    •
  • Derivatives Exchanges

    •
  • Insurance Companies

    •
  • Multinational Corporations

    •
  • Accountancy Firms

    •
  • Consultancy Firms

    •
  • Law Firms

    •
  • Rating Agencies

    •
  • Multi-lateral Financial Institutions

    •
  • Others


    •
    Course Level and Number of Courses
    Basic Level. Library of 6 Courses

    Instructional Method
    Dynamic, Interactive e-learning

    Recommended Background
    Familiarity with basic financial concepts


    Credit Risk Modeling
    Time taken to complete each Course: Two - Three hours

    1 Conceptual Approach to Credit Risk Modeling

    • Objectives
    • Introduction
    • Distribution of credit losses
    • Conditional Vs. Unconditional models
    • Approaches to credit risk aggregation
    • Correlation between credit events

    2. JP Morgan’s Credit Metrics

    • Objective
    • Introduction
    • CreditMetrics
    • Outputs
    • Applications

    3. CSFB’s CreditRisk+

    • Objective
    • Introduction
    • Modeling CreditRisk+
    • Application

    4. KMV Credit Monitor

    • Objectives
    • Introduction
    • KMV model
    • Distance to default

    5. McKinsey CreditPortfolioView

    • Objectives
    • Introduction
    • Default prediction model
    • Conditional transition matrix

    6. Credit Portfolio Management

    • Objectives
    • Introduction
    • Credit Portfolio Management Approach
    • Credit Risk Management Tools
    • Credit derivatives and asset securitization

    Job Aids

    • Regulations
    • References

    A comprehensive e-learning product covering the concepts, procedures, market participants, and various statutes that govern the process & participants

     

     

    The theme of this product:

    • Fundamentals of Credit Derivatives
    • Analysis of complex issues and different applications
    • Global perspective of Credit Derivatives to financial institutions, central banks and regulatory agencies

    Overview

    The development of credit derivatives is a logical extension of two significant developments: securitization, and
    derivatives. Credit derivatives are contracts that transfer an asset’s risk and return from one counterparty to another without transferring ownership of the underlying asset. The choice of the contract depends upon the goals a financial institution is looking to achieve. The global market for credit derivatives is still quite small compared with other derivatives markets, but it is growing rapidly. A number of impediments could slow the growth of this market, most of which revolve around the complexity involved in pricing and documenting these transactions.
    After completing this course you will be conversant with:
    • Accounting and control considerations
    • Why deals are structured in certain ways
    • The importance of risk management and control matters
    • The impact of E-commerce on credit derivatives trading
    • Taxation issues arising from credit derivatives
    • Regulatory risks surrounding credit derivatives transactions
    Target Audience
    Everyone involved in the global financial services industry (as a provider, user, regulator or advisor of product/services, marketplace/exchange) would benefit from PRMIA’s innovative solutions.

  • Supervisory Agencies

    •
  • Central Banks

    •
  • Financial Institutions

    •
  • Commercial Banks

    •
  • Investment Banks

    •
  • Housing Societies/Thrifts

    •
  • Mutual Funds

    •
  • Brokerage Houses

    •
  • Stock Exchanges

    •
  • Derivatives Exchanges

    •
  • Insurance Companies

    •
  • Multinational Corporations

    •
  • Accountancy Firms

    •
  • Consultancy Firms

    •
  • Law Firms

    •
  • Rating Agencies

    •
  • Multi-lateral Financial Institutions

    •
  • Others


    •
    Course Level and Number of Courses
    Basic Level. Library of 23 Courses

    Instructional Method
    Dynamic, Interactive e-learning

    Recommended Background Familiarity with basic financial concepts

    Credit Derivatives
    Time taken to complete each Course: Two - Three hours

    1.Overview to Credit Derivatives

    • Objectives
    • Introduction
    • Types
    • Applications
    • Other Issues
    2.Credit Risk
    • Objectives
    • Introduction
    • Measuring Credit Risk
    • Managing Credit Risk
    • Credit Pricing
    • Models for Credit Risk
    • Application of Credit Derivatives

    3.Credit Rating Dynamics

    • Objectives
    • Introduction
    • Approaches
    4.Emerging Markets
    • Objectives
    • Introduction
    • Why Credit Derivatives
    • Risks
    • Credit Derivatives Structures
    • Total Return Products
    • Credit Default Risk Products
    • Credit Spread Risk Products
    • Structured Notes
    • Convertibility Products
    5. Classic Credit Derivatives
    • Objectives
    • Introduction
    • Credit Guarantees
    • Revolving Credit
    • Repos
    • Asset Swaps
    6.Total Return Swaps
    • Objectives
    • Basics
    • Benefits
    • Usage
    7.Credit Linked Notes: Structured Notes
    • Objectives
    • Credit Linked Notes
    • Structured Notes
    • Types
    8. Repackaged Notes
    • Objectives
    • Concepts
    • Repackaging Vehicles
    • Repackaging Strategies
    9. Credit Portfolio Securitization Structures
    • Objectives
    • Introduction
    • CLOs and CBOs
    • Key Areas of Risk
    • Other issues

    10. Case Studies for CPSS

    • Objectives
    • Rose
    • Nations Bank Commercial Loan Master Trust
    • CORE
    • Glacier
    • Bistro
    • Eisberg Finance Ltd.
    • C Star
    11. Credit Default Swaps
    • Objectives
    • Introduction
    • Main Features
    • Pricing Credit Default Swaps
    • Uses of Credit Default Swaps
    • Types of Credit Default Swaps
    • Disadvantages of Credit Swaps
    12. Case Studies for Credit Default Swaps
    • Objectives
    • Bank Synthetic Securitization
    • Single Name Credit Risk Transfer
    • H.K Synthetic Deal
    • The Fourth Promise Securitization Programme
    13. Credit Spread Options
    • Objectives
    • Basics
    • Credit Spread Puts
    • Credit Spread Calls
    • Credit Spread Collars
    • Credit Spread Forwards
    14. Banking and Institutional Applications
    • Objectives
    • Introduction
    • Credit Portfolio Management through Credit Derivatives
    • Examples
    • Portfolio Credit Default Swaps
    • BISTRO (Broad Index Secured Trust Offering)
    15. Investor Applications
    • Objectives
    • Introduction
    • Investor Applications
    • Examples

    16. Corporate Applications

    • Objectives
    • Introduction
    • Main Applications of Credit Derivatives
    • Present Users of Credit Derivatives

    17. Pricing Credit Derivative Instruments

    • Objectives
    • Introduction
    • Pricing Default Swaps
    • Asset Swap Approach
    • Pricing Credit Spread Options

    18. Risks Involved In Credit Derivatives

    • Objectives
    • Introduction
    • Credit Derivatives Risks
    • Various Risks- an in-depth Look
    • Risk Management Principles
    • Interactive Game
    19.Documentation
    • Objectives
    • Introduction
    • ISDA Master Agreement
    • Credit Definitions
    • Some more definitions
    • Documentation for different
      transactions

    20. Regulations

    • Objectives
    • Introduction
    • Unfunded Credit Derivatives
    • Funded Credit Derivatives
    • Mismatches
    • Banking and Trading Book
    • The New Capital Adequacy
    • International Bank Regulations
    21. Legal Issues
    • Objectives
    • Introduction
    • General Legal Issues
    • Documentation
    • Confidentiality
    • Netting
    • Gaming
    • Securities and Insider Dealing

    22. Accounting

    • Objectives
    • General Principles
    • Accounting for Credit Derivatives
    • Example-Total Return Swaps
    • Example-Credit Default Swap

    23. Taxation

    • Objectives
    • Total Return Swaps
    • Default Swaps
    • Credit Linked Notes & Credit Spread Options

    JOB AIDS

    • Disclosures
    • Regulations
    • Financial Calculators
    • Policy Template
    • Credit Derivatives data for 50 Banks
    • Global Best Practices