Latest posts
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đź’Ł Loan Loss Provisioning and Credit Risk Assessment: From Bad Loans to Smart Boards
🎯 Setting the Scene: Why Do Banks Fear Defaults? Imagine you lent your friend \$1,000 and he told you, “Bro, I might pay you back…”That might is the starting point of credit risk. Banks face this risk every day—but they don’t just sit and hope for the best. They plan for it. And that plan…
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🏦 Credit Risk Policies and Credit Asset Classification: The Bank’s Defensive Playbook
If a bank were a superhero, credit risk would be its sneaky arch-nemesis — disguised in nice suits, smiling borrowers, and well-written business plans. But behind those smiles lies the ever-present threat: What if they don’t pay back? Let’s unravel how banks protect themselves from this ever-lurking danger. 🎯 The Foundations of Lending: Why Policies…
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💥 Credit Risk: From Expected to Unexpected Losses – A Guided Expedition
Welcome to the wild jungle of credit risk, where default probabilities, exposure amounts, and loss rates form the ecosystem — and banks act as cautious explorers. 🧠But instead of snakes and tigers, we deal with Expected Loss $($EL$)$ and Unexpected Loss $($UL$)$. Let’s begin this expedition. 🌱 Part 1: Understanding the Credit Risk Factors…