The first full analysis of the latest advances in managing credit risk
"Against a backdrop of radical industry evolution, the authors of Managing Credit Risk: The Next Great Financial Challenge provide a concise and practical overview of these dramatic market
and technical developments in a book which is destined to become a standard reference in the field." —Thomas C. Wilson, Partner, McKinsey & Company, Inc
"Managing Credit Risk is an outstanding intellectual achievement. The authors have provided investors a comprehensive view of the state of credit analysis at the end of the millennium."
—Martin S. Fridson, Financial Analysts Journal
"This book provides a comprehensive review of credit risk management that should be compulsory reading for not only those who are responsible for such risk but also for financial analysts and
investors. An important addition to a significant but neglected subject." —B.J. Ranson, Senior Vice-President, Portfolio Management, Bank of Montreal
The phenomenal growth of the credit markets has spawned a powerful array of new instruments for managing credit risk, but until now there has been no single source of information and
commentary on them. In Managing Credit Risk, three highly regarded professionals in the field have—for the first time—gathered state-of-the-art information on the tools, techniques, and
vehicles available today for managing credit risk. Throughout the book they emphasize the actual practice of managing credit risk, and draw on the experience of leading experts who have
successfully implemented credit risk solutions
Starting with a lucid analysis of recent sweeping changes in the U.S. and global financial markets, this comprehensive resource documents the credit explosion and its remarkable
opportunities—as well as its potentially devastating dangers. Analyzing the problems that have occurred during its growth period—S&L failures, business failures, bond and loan defaults,
derivatives debacles—and the solutions that have enabled the credit market to continue expanding, Managing Credit Risk examines the major players and institutional settings for credit risk,
including banks, insurance companies, pension funds, exchanges, clearinghouses, and rating agencies. By carefully delineating the different perspectives of each of these groups with respect
to credit risk, this unique resource offers a comprehensive guide to the rapidly changing marketplace for credit products
Managing Credit Risk describes all the major credit risk management tools with regard to their strengths and weaknesses, their fitness to specific financial situations, and their
effectiveness. The instruments covered in each of these detailed sections include: credit risk models based on accounting data and market values; models based on stock price; consumer finance
models; models for small business; models for real estate, emerging market corporations, and financial institutions; country risk models; and more. There is an important analysis of default
results on corporate bonds and loans, and credit rating migration. In all cases, the authors emphasize that success will go to those firms that employ the right tools and create the right
kind of risk culture within their organizations. A strong concluding chapter integrates emerging trends in the financial markets with the new methods in the context of the overall credit
environment
Concise, authoritative, and lucidly written, Managing Credit Risk is essential reading for bankers, regulators, and financial market professionals who face the great new challenges—and
promising rewards—of credit risk management