Handbook of credit risk management

Document presentation

This document proposes financial institutions with a credit risk (or counterpart risk) management policy for the business line "credit to private individuals".

The wording "credit" refers here to all operations where the financial institution swaps any service for a promise of scheduled payments (credit cards, mortgage loans, leasing ...).

Voluntarily, we have left aside the aspects of compliance with prudential (Basel II-inspired) regulations, these regulations presenting themselves in a sufficiently precise way.

Critical points addressed

How to avoid accountability conflicts between “Risk management” and “Sales” departments?
How to choose the right amount of a loan; in particular, when is it possible and advisable to make "up sell" or "down sell" counter-proposals to the customer?
Why "origination controls " should never be final, but only taken into account through statistical models?
How to separate the effects of “Origination policy" and “Collections policy” on the overall risk performance?
Proposal of a full risk monitoring dashboard

Download full document (French) as a PDF file

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