Credit Risk Scorecards: Developing And Implemen...

This business-focused course provides a high-level introduction to credit risk management; detailed end-to-end methodology training for risk scorecard development for retail and SME portfolios; and discussions about scorecard implementation and risk strategy development and about scorecard and portfolio management reporting. The focus of the course is the development of application scorecards, but issues relating to behavior scorecard development are also explored. Detailed mechanics of scorecard development are covered, but more importantly, students learn to think critically about each phase and use a combination of business and statistical criteria to make better decisions. These objectives are reflected in three sections. Section 1, Introduction to Credit Risk: This section provides a high-level overview of the credit risk industry, risk management tools, and strategies. Students will understand the different uses of credit risk scorecards and learn industry terminology, as well as understand the main personas involved in successful credit scoring projects. Section 2, Risk Scorecard Development: Students learn how grouped-variable, points-based credit risk scorecards are developed, from the planning stages to delivery. The main focus is on business issues, but statistical aspects of scorecard development are also explored. Students learn practical tips and tricks for tasks such as variable binning, creating intelligent variables and scorecards, and using a wide variety of data sources.Section 3, Implementation and Maintenance: This section covers post-development activities, including setting cutoffs, developing strategies, and creating scorecard maintenance reports. Students will understand how scorecards are used to make better decisions, enabling them to build more relevant scorecards.

The transitional floor calculations described above are linked to the general risk-based capital rules. As noted above, the agencies issued the Basel IA ANPR outlining possible modifications to those rules and are developing an NPR in this regard. The agencies are still considering the extent and nature of these modifications to the general risk-based capital rules and the scope of application of these modifications, including for banks that transition to the advanced approaches. The agencies expect banks that meet the threshold criteria in section 1(b)(1) of the proposed rule (that is, core banks) as of the effective date of the rule, and banks that opt-in pursuant to section 1(b)(2) at the earliest possible date, will use the general risk-based capital rules in place immediately before the rule becomes effective both during the parallel run and as a basis for the transitional floor calculations. Other changes to the general risk-based capital rules (outside the scope of the changes outlined in the Basel IA ANPR) may be considered by the agencies, as appropriate. Question 10: The agencies seek comment on this approach and on how and to what extent future modifications to the general risk-based capital rules should be incorporated into the transitional floor calculations for advanced approaches banks. 781b155fdc