Why is credit risk analysis an important component of FI risk management?
Answer to relevant QuestionsIn what ways does the credit analysis of a mid-market borrower differ from that of a small-business borrower?How does an FI evaluate its credit risks with respect to consumer and small business loans?Consider the coefficients of Altman’s Z-score. Can you tell by the size of the coefficients which ratio appears most important in assessing the creditworthiness of a loan applicant? Explain.Use the balance sheet and income statement below to construct a statement of cash flows for 2016 for Clancy’s Dog BiscuitCorp.What are core deposits? What role do core deposits play in predicting the probability distribution of net deposit drains?
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