Fund Management & Investment - Books

Credit Risk for Private Banking: Assessing the Credit of High Net Worth Individuals

Gain a competitive edge by better managing and assessing credit risk. Credit Risk for Private Banking will ensure client managers have a comprehensive understanding of credit risk in private banking. On completion of this self study course you will be able to assess and manage credit risk for the benefit of your bank and your client. Interest areas: wealth management, risk management.

Price: £199

Questions? Email us.

View other books by author(s)

Gain a competitive edge by better managing and assessing credit risk. This book will ensure client managers have a comprehensive understanding of credit risk in private banking. After reading you will have the tools to assess and manage credit risk for the benefit of your bank and your client.

The book includes self-test exercises which enable you to practise your new skills and ensure principles are internalised.

In six comprehensive modules, you will learn how to:
• undertake a thorough risk assessment;
• structure portfolios containing credit products;
• analyse complex new credit products;
• properly document credit agreements;
• monitor changes in credit risk;
• structure credit products to maximise the profitability of the bank;
• develop business with a known and acceptable level of risk;
• set up appropriate controls to mitigate risk;
• better identify business with an acceptable return;
• construct comprehensive and succinct credit applications;
• assess collateral for repayment in case of default;
• better understand your client's exposure to risk.

Who should read this?
Client advisors, private bankers, wealth managers, credit risk practitioners, risk managers, and investment managers.

Also by Eve Harvey:

Credit Risk for Private Banking (published 2003)
Investment Management, 2nd edition (published 2000)
Equity Analysis, 2nd edition (published 2001)

Preface

Module 1 : The importance of credit products

Introduction
The market
Changes in private banking
      Increased competition
      Increased sophistication
      Increased speculation
      Changing client base
      Development of universal banks
      Consequences of change
Why worry about capital?
      A bank’s balance sheet
      The Basle Accord and capital adequacy requirements
      The terminology of capital adequacy requirements
      Capital adequacy regulations relevant to private banking
Return on allocated capital
Credit products
      Five examples of requests from clients
      Suggestions for responses to these clients
Borrowing structures
Risks in lending
      Credit risk
      Settlement risk
      Market risk
      Liquidity risk
      Operational risk
      Legal risk
      Bulk risk
      Compliance risk
      Reputation risk
Conclusion
Exercises

Module 2 : Credit risk assessment

Introduction
Why undertake a credit review?
The risk policy framework
Mitigating risk
      Diversification
      Hedging
The importance of the client
      Corporate clients in general
      Private clients in general
      Entrepreneurs
      Trusts and family partnerships
Two basic models for assessing credit risk
       Cs + PARTS
      CAMPARI
Classifying clients
      Psychographics
      Personality types
      Life cycle analysis
Analysing corporate risk
      Macro factors
      Evaluating an industry
      Company-specific factors
      Management
      Sources of information on companies
Allowing for volatility
Case study
      Background
      Suggested solution
Conclusion
Exercises

Module 3 : Format of the credit review

Introduction
The four key factors
      Suitability of the client
      Purpose of the facility
      Repayment
      Maturity
SWOT analysis
The credit application
      The basic information required
      Approval before completion
Conclusion
Exercises

Module 4 : Collateral

Introduction
General characteristics of acceptable collateral
Specific types of collateral
      Property
      Shares
      Unit trusts and investment companies
      Fixed-income investments
      Bank deposits
      Guarantees/indemnities
      Standby letters of credit
      Physical assets
      Assurance and insurance
Aspects of credit risk
      Credit ratings in relation to fixed-income instruments
      Diversification of collateral
      Currency and transfer risk
      Legal risk and enforceability
Haircuts and lending value
Eligibility and acceptability of collateral
      Single-security and diversified collateral
      Other factors making for unacceptability
Valuation of collateral
Investment portfolios as collateral
      Types of portfolio risk
      Risks common to all portfolios
      Risk in fixed-income portfolios
      Default risk
      Market risk in equity portfolios
Liquidity considerations
Sample guidelines on credit policy
      Basic guidelines
      Haircuts and lending values for individual assets
      Shares and unit trusts
      Property
      Guarantees
      New shares subscription
      Haircuts and lending values for discretionary portfolios managed   by ABC Bank
      Currency
Exercises

Module 5 : Documentation and risk management

Introduction
Documentation
      Opening accounts
      General considerations on documentation
      Special note on legal perspective in this section
      Facility letters
      Special considerations on private clients
      Special considerations on corporate clients
      Transaction-specific considerations
      Collateral-specific considerations
      Special considerations on cross-border elements in transactions
Risk management
      The monitoring process
      Excess reports
      Margin calls and close-outs
      Inadequate documentation
      Warning signs of business failure
Conclusion
Case studies
      Case study . : Corporate borrower
      Case study . : Private individual
Exercises

Module 6 : Derivatives, structured products and hedge funds

Introduction
Simple derivatives
      Forward foreign exchange transactions
      Futures
      Contracts for difference
      Options
      Warrants
      Swaps
      Trading portfolios
Structured products with derivatives
      Equity index-linked swaps
      Equity collars
      Credit derivatives
      Venture capital trust notes
Hedge funds
      Varying strategies
      Funds of funds
Conclusion
Exercises

Answers to exercises

Glossary

Credit Risk for Private Banking: Assessing the Credit of High Net Worth Individuals

Table of Contents

Related Titles

Your Shopping

Edit Shopping Cart