Credit Risk Analysis

From Open Risk Manual

Definition

Credit Risk Analysis denotes a set of concepts, tools and processes that are associated with the organized extension of credit (e.g., lending) by an organization. The objective of credit risk analysis is to evaluate qualitative and quantitative aspects of credit risk and thereby support decision making (Credit Origination, Credit Portfolio Management).

Methodologies

There is a wide range of methodologies to assist with sound credit risk analysis. One of the popular frameworks is the Five Cs Of Credit Analysis. In general the methodologies vary depending on the type of borrower. A classification that is based on regulatory guidelines is as follows[1]

See Also

References

  1. EBA, Guidelines on loan origination and monitoring EBA/GL/2020/06

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