IT Systems for Credit Risk Management

Renzo Traversini and Anselmo Marmonti

Chapter 11 in Retail Credit Risk Management, 2013, pp 201-218 from Palgrave Macmillan

Abstract: Abstract In this chapter, we describe the general characteristics of IT Credit Risk Management systems. The scope of these IT systems that are part of the wider IT infrastructure of the bank comprises its entire credit cycle (see for instance Basel Committee, 1999). Key activities of the cycle to be supported are: (1) Risk taking, that in the case of banks comprises commercial banking activities, all lending activities that address the different segments of the bank’s customer base, and credit risk exposures connected to trading activities. (2) Risk management, that covers the activities a bank sets up to classify the exposure, determine the creditworthiness, measure the risk components, analyze the individual and overall risk situations, diagnose the critical situations, and design and activate counter-actions. (3) Risk mitigation, referring to how the bank manages and monitors risk mitigation activities. (4) Risk pricing, covering how a bank links credit product pricing to creditworthiness, profitability and impact on overall economic capital

Keywords: Credit Risk; Basel Committee; Risk Component; Credit Portfolio; Risk Engine (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-00676-9_11

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DOI: 10.1057/9781137006769_11

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