Credit Engineering for Bankers: A Practical Guide for Bank Lending

More efficient credit portfolio engineering can increase the decision-making power of bankers and boost the market value of their banks. By implementing robust risk management procedures, bankers can develop comprehensive views of obligors by integrating fundamental and market data into a portfolio framework that treats all instruments similarly. Banks that can implement strategies for uncovering credit risk investments with the highest return per unit of risk can confidently build their businesses.

Through chapters on fundamental analysis and credit administration, authors Morton Glantz and Johnathan Mun teach readers how to improve their credit skills and develop logical decision-making processes. As readers acquire new abilities to calculate risks and evaluate portfolios, they learn how credit risk strategies and policies can affect and be affected by credit ratings and global exposure tracking systems. The result is a book that facilitates the discipline of market-oriented portfolio management in the face of unending changes in the financial industry.

Concentrates on the practical implementation of credit engineering strategies and tools Demonstrates how bankers can use portfolio analytics to increase their insights about different groups of obligorsInvestigates ways to improve a portfolio’s return on risk while minimizing probability of insolvency

PART ONE: NEW APPROACHES TO FUNDAMENTAL ANALYSIS 1. The Credit Analysis and the Subprime Mortgage Crisis 2. Introduction to Bank Risk Management 3. International Financial Reporting Standards 4. Multivariate Ratio and Cash Flow Analysis: A Banker’s Guide 5. Credit Analysis of Seasonal Businesses: an Integrated Approach 6. Asset Based Lending 7. Cash Flow Analysis: a Banker’s Guide 8. A Banker’s Primer on Quantitative and Decision Analysis 9. Projections and Risk Assessment 10. The Sustainable Growth and Credit Risk Management 11. Specialized Lending Exposures 12. Recognition and Diagnosis of Troubled Loans

PART TWO: CREDIT ADMINISTRATION 13. Risk Governance 14. Bank Failure, Capital Adequacy, Regulatory Capital Ratios, and Loan Loss Provisioning 15. Quantitative Credit and Market Risk Analysis 16. Portfolio Optimization and Management of Default Risk 17. Exotic Options, Option Engineering, and Credit Risk 18. An Introduction to Credit Derivatives 19. Loan Pricing 20. Global Exposure Tracking Systems 21. Corporate Risk Rating: Design and Application