Credit Derivatives
After completing this reading, you should be able to: Describe a credit derivative credit default swap (CDS) total return swap and collateralized debt obligation (CDO). Explain how to account for credit risk exposure in valuing a CDS. Identify the default…
Sovereign Default Risk
After completing this reading, you should be able to: Identify and explain the different sources of country risk. Evaluate the methods for measuring country risk and discuss the limitations of using those methods. Compare and contrast foreign currency defaults and…
Credit Scoring and Rating
After completing this reading, you should be able to: Compare the credit scoring system to the credit rating system in assessing credit quality and describe the different types of each system. Distinguish between through-the-cycle and point-in-time credit rating systems. Describe…
Governance
After completing this reading, you should be able to: Define risk management responsibilities in an organization and explain the three lines of defense framework for effective risk management and control. Explain the processes that lead to risk-taking, including credit origination,…
Fundamentals of Credit Risk
After completing this reading, you should be able to: Define credit risk and explain how it arises using examples. Explain the distinctions between insolvency, default, and bankruptcy. Identify and describe transactions that generate credit risk. Describe the entities that are…
Climate-related Risk Drivers and their Transmission Channels
After completing this reading, you should be able to: Describe climate-related risk drivers and explain how those drivers give rise to different types of risks for banks. Compare physical and transition risk drivers related to climate change. Assess the potential…
The Credit Suisse CoCo Wipeout: Facts, Misperceptions, and Lessons for Financial Regulation
After completing this reading, you should be able to: Describe the features and mechanics of contingent convertible bonds (CoCos) and explain the rationale for banks to issue them. Explain the rescue of Credit Suisse by Swiss regulators in 2023 and…
Digital Resilience and Financial Stability. The Quest for Policy Tools in The Financial Sector
After completing this reading, you should be able to: Describe characteristics of cyber risks and information/communication technology (ICT) risks faced by financial institutions. Assess the interactions between cyber and ICT risks and financial risks and explain how cyber and ICT…
The Crypto Ecosystem: Key Elements and Risks
After completing this reading, you should be able to: Describe the key elements of the crypto ecosystem, including unbacked crypto, stablecoins, smart contracts, and DeFi services. Describe the structural flaws inherent in various elements of the crypto ecosystem. Describe the…
Artificial Intelligence Risk Management Framework
After completing this reading, you should be able to: Describe how organizations can frame the risks related to AI and explain the challenges that should be considered in AI risk management. Identify AI actors across the AI lifecycle dimensions and…
