Framework for Credit Risk Management

By Pompella, Maurizio | Journal of Risk and Insurance, March 2003 | Go to article overview

Framework for Credit Risk Management


Pompella, Maurizio, Journal of Risk and Insurance


Framework for Credit Risk Management, by Brian Coyle, 2000, Chicago, Ill.: Fitzroy Dearborn.

Framework for Credit Risk Management, by Brian Coyle, deals with one of the most debated subjects in economic literature, especially in the field of banking: how to identify, appraise, and control credit risk. It is a most comprehensive manual that may serve as a guide to credit risk management, but it is a very brief one, for it has been structured as an introductory survey. The main topics of the book are credit risk-the focus being on a series of different configurations of it-and the "canons of lending" (good lending principles).

Despite a limited number of pages (137), which results, as mentioned above, in a small but easily readable book, the volume offers a telling outline of bank credit policies and risk-reduction strategies needed to contain the consequences of credit risk. It also investigates the methods used to face the ex post impact of risk-particularly security forms, covenants, and conditional lending (when the borrower is required to provide loan guarantees)-comparing how banks and nonfinancial companies behave in the case of debtor's default (nonpayment occurrences). The book deals with both trade credit and bank credit, in fact, and analyzes some of the contractual instruments available to cope with counterpart risk, including credit insurance.

Nevertheless, the author seems to follow a traditional style, also showing a preference for a very qualitative approach. As a consequence, he ignores most of the quantitative and recent literature concerned with the management of values at risk and credit risk, except for a few references, somewhere in Chapter 6, to credit scoring.

The first chapter simply defines credit risk and explains the risk-reward trade-off that lenders have to evaluate in order to decide the terms and conditions of a loan.

Chapters 2 and 3 deal with trade credit and bank credit, respectively. The former provides an overview of collective and individual risks that a trading company should consider when credit customers are grouped (misdiversification). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Framework for Credit Risk Management
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.