Credit Risk Management (FRM Part 2 – Book 2 – Credit Risk Measurement and Management – Ch 3)

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After completing this reading, you should be able to:
- Describe key elements of an effective lending or financing policy.
- Explain the importance and challenges of setting exposure and concentration limits.
- Describe the scope and allocation processes of a bank’s credit facility and explain bank-specific policies and actions to reduce credit risk.
- Discuss factors that should be considered during the credit asset classification process.
- Describe and explain loan loss provisions and loan loss reserves.
- Identify and explain the components of expected loss and distinguish between expected loss and unexpected loss.
- Explain the requirements for estimating expected loss under IFRS 9.
- Describe a workout procedure for loss assets and compare the following two approaches used to manage loss assets: retaining loss assets and writing off loss assets.
- Explain the components of credit risk analysis.
- Explain the components of credit risk management capacity, and outline key questions that the board of directors of a bank should ask.

[ahmedaldorr]

Would u please update the link for Part 1?