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Author: Elizabeth Mays Publisher: CreateSpace ISBN: 9781450578967 Category : Business & Economics Languages : en Pages : 266
Book Description
This is the second edition of Credit Scoring For Risk Managers: The Handbook for Lenders. Like the first edition, it was written for bankers and other consumer lenders who need a clear understanding of how to use credit scoring effectively throughout the loan life cycle. In today's financial system, scoring is used by virtually all lenders for all types of consumer lending assets, making it vitally important that risk managers understand how to manage and monitor scores and how to set policies for their use. This edition is substantially different from the first edition published in 2004. The world's economies have been through a major financial crisis and severe recession and some have questioned the role and value of models and scores used by lenders in the years leading up to the U.S. housing collapse and economic downturn. We have devoted a significant portion of the book to topics relevant to ensuring scorecards are properly managed through volatile environments and controlling the risk of using credit scores for decision-making. Ten of the book's sixteen chapters are new. Many focus on scorecard management practices and on controlling model risk. Score management refers to all the activities model managers and users engage in after the scorecard is developed. These include setting proper lending policies to use in conjunction with the score, periodic back-testing and validation, and remediation of any issues that may arise related to scorecard performance. Chapter 4 takes the reader step by step through a scorecard development project and discusses best practices for managing and documenting scorecard projects to increase the transparency of the performance, assumptions and limitations of scoring models. The last three chapters are devoted to the important topic of score model governance. Chapter 14 describes how to design a model governance framework to ensure credit scoring models are properly developed, used and validated on an on-going basis. Chapter 15 is focused on model monitoring and back-testing and describes a set of reports lenders should create and review to ensure their scorecards are performing well. Independent review of risk models by a third-party model expert is an important part of sound model governance. In Chapter 16 we describe how to carry out a thorough independent model review. Other chapters focus on new material not covered in the previous edition including types of data that are used as predictive information in scores (Chapter 3), fair lending analysis of scorecards and the creation of adverse action reasons (Chapter 11), the use of scores as components of other models (Chapter 10), common scoring mistakes to avoid (Chapter 12) and the important topic of reject inference (Chapter 9).
Author: Elizabeth Mays Publisher: CreateSpace ISBN: 9781450578967 Category : Business & Economics Languages : en Pages : 266
Book Description
This is the second edition of Credit Scoring For Risk Managers: The Handbook for Lenders. Like the first edition, it was written for bankers and other consumer lenders who need a clear understanding of how to use credit scoring effectively throughout the loan life cycle. In today's financial system, scoring is used by virtually all lenders for all types of consumer lending assets, making it vitally important that risk managers understand how to manage and monitor scores and how to set policies for their use. This edition is substantially different from the first edition published in 2004. The world's economies have been through a major financial crisis and severe recession and some have questioned the role and value of models and scores used by lenders in the years leading up to the U.S. housing collapse and economic downturn. We have devoted a significant portion of the book to topics relevant to ensuring scorecards are properly managed through volatile environments and controlling the risk of using credit scores for decision-making. Ten of the book's sixteen chapters are new. Many focus on scorecard management practices and on controlling model risk. Score management refers to all the activities model managers and users engage in after the scorecard is developed. These include setting proper lending policies to use in conjunction with the score, periodic back-testing and validation, and remediation of any issues that may arise related to scorecard performance. Chapter 4 takes the reader step by step through a scorecard development project and discusses best practices for managing and documenting scorecard projects to increase the transparency of the performance, assumptions and limitations of scoring models. The last three chapters are devoted to the important topic of score model governance. Chapter 14 describes how to design a model governance framework to ensure credit scoring models are properly developed, used and validated on an on-going basis. Chapter 15 is focused on model monitoring and back-testing and describes a set of reports lenders should create and review to ensure their scorecards are performing well. Independent review of risk models by a third-party model expert is an important part of sound model governance. In Chapter 16 we describe how to carry out a thorough independent model review. Other chapters focus on new material not covered in the previous edition including types of data that are used as predictive information in scores (Chapter 3), fair lending analysis of scorecards and the creation of adverse action reasons (Chapter 11), the use of scores as components of other models (Chapter 10), common scoring mistakes to avoid (Chapter 12) and the important topic of reject inference (Chapter 9).
Author: Naeem Siddiqi Publisher: John Wiley & Sons ISBN: 1118429168 Category : Business & Economics Languages : en Pages : 124
Book Description
Praise for Credit Risk Scorecards "Scorecard development is important to retail financial services in terms of credit risk management, Basel II compliance, and marketing of credit products. Credit Risk Scorecards provides insight into professional practices in different stages of credit scorecard development, such as model building, validation, and implementation. The book should be compulsory reading for modern credit risk managers." —Michael C. S. Wong Associate Professor of Finance, City University of Hong Kong Hong Kong Regional Director, Global Association of Risk Professionals "Siddiqi offers a practical, step-by-step guide for developing and implementing successful credit scorecards. He relays the key steps in an ordered and simple-to-follow fashion. A 'must read' for anyone managing the development of a scorecard." —Jonathan G. Baum Chief Risk Officer, GE Consumer Finance, Europe "A comprehensive guide, not only for scorecard specialists but for all consumer credit professionals. The book provides the A-to-Z of scorecard development, implementation, and monitoring processes. This is an important read for all consumer-lending practitioners." —Satinder Ahluwalia Vice President and Head-Retail Credit, Mashreqbank, UAE "This practical text provides a strong foundation in the technical issues involved in building credit scoring models. This book will become required reading for all those working in this area." —J. Michael Hardin, PhD Professor of StatisticsDepartment of Information Systems, Statistics, and Management ScienceDirector, Institute of Business Intelligence "Mr. Siddiqi has captured the true essence of the credit risk practitioner's primary tool, the predictive scorecard. He has combined both art and science in demonstrating the critical advantages that scorecards achieve when employed in marketing, acquisition, account management, and recoveries. This text should be part of every risk manager's library." —Stephen D. Morris Director, Credit Risk, ING Bank of Canada
Author: Elizabeth Mays Publisher: Global Professional Publishi ISBN: 9781888988017 Category : Business & Economics Languages : en Pages : 392
Book Description
· Credit scoring is a vital and sometimes misunderstood tool in financial services · Evaluates the different systems available Bankers and lenders depend on credit scoring to determine the best credit risks--and ensure maximum profit and security from their loan portfolios. Handbook of Credit Scoring offers the insights of a select group of experts on credit scoring systems. Topics include: Scoring Applications, Generic and Customized Scoring Models, Using consumer credit information, Scorecard modelling with continuous vs. Classed variables, Basic scorecard Development and Validation, Going beyond Credit Score, Data mining, Scorecard collection strategies, project management for Credit Scoring
Author: Naeem Siddiqi Publisher: John Wiley & Sons ISBN: 1119279151 Category : Business & Economics Languages : en Pages : 469
Book Description
A better development and implementation framework for credit risk scorecards Intelligent Credit Scoring presents a business-oriented process for the development and implementation of risk prediction scorecards. The credit scorecard is a powerful tool for measuring the risk of individual borrowers, gauging overall risk exposure and developing analytically driven, risk-adjusted strategies for existing customers. In the past 10 years, hundreds of banks worldwide have brought the process of developing credit scoring models in-house, while ‘credit scores' have become a frequent topic of conversation in many countries where bureau scores are used broadly. In the United States, the ‘FICO' and ‘Vantage' scores continue to be discussed by borrowers hoping to get a better deal from the banks. While knowledge of the statistical processes around building credit scorecards is common, the business context and intelligence that allows you to build better, more robust, and ultimately more intelligent, scorecards is not. As the follow-up to Credit Risk Scorecards, this updated second edition includes new detailed examples, new real-world stories, new diagrams, deeper discussion on topics including WOE curves, the latest trends that expand scorecard functionality and new in-depth analyses in every chapter. Expanded coverage includes new chapters on defining infrastructure for in-house credit scoring, validation, governance, and Big Data. Black box scorecard development by isolated teams has resulted in statistically valid, but operationally unacceptable models at times. This book shows you how various personas in a financial institution can work together to create more intelligent scorecards, to avoid disasters, and facilitate better decision making. Key items discussed include: Following a clear step by step framework for development, implementation, and beyond Lots of real life tips and hints on how to detect and fix data issues How to realise bigger ROI from credit scoring using internal resources Explore new trends and advances to get more out of the scorecard Credit scoring is now a very common tool used by banks, Telcos, and others around the world for loan origination, decisioning, credit limit management, collections management, cross selling, and many other decisions. Intelligent Credit Scoring helps you organise resources, streamline processes, and build more intelligent scorecards that will help achieve better results.
Author: Jiří Witzany Publisher: Springer ISBN: 3319498002 Category : Business & Economics Languages : en Pages : 264
Book Description
This book introduces to basic and advanced methods for credit risk management. It covers classical debt instruments and modern financial markets products. The author describes not only standard rating and scoring methods like Classification Trees or Logistic Regression, but also less known models that are subject of ongoing research, like e.g. Support Vector Machines, Neural Networks, or Fuzzy Inference Systems. The book also illustrates financial and commodity markets and analyzes the principles of advanced credit risk modeling techniques and credit derivatives pricing methods. Particular attention is given to the challenges of counterparty risk management, Credit Valuation Adjustment (CVA) and the related regulatory Basel III requirements. As a conclusion, the book provides the reader with all the essential aspects of classical and modern credit risk management and modeling.
Author: M. Anolli Publisher: Springer ISBN: 1137006765 Category : Business & Economics Languages : en Pages : 367
Book Description
Introducing the fundamentals of retail credit risk management, this book provides a broad and applied investigation of the related modeling theory and methods, and explores the interconnections of risk management, by focusing on retail and the constant reference to the implications of the financial crisis for credit risk management.
Author: Elizabeth Mays Publisher: Global Professional Publishi ISBN: 9781888998382 Category : Business & Economics Languages : en Pages : 280
Book Description
Covers: � Implementing an application scoring system � Behavior modeling to manage your portfolio � Incorporating economic factors � Statistical techniques for choosing the optimal credit risk model � How to set cutoffs and override rules � Modeling for the sub-prime market � How to evaluate and monitor credit risk models This is an indispensable guide for credit professionals and risk managers who want to understand and implement modeling techniques for increased profitability. In this one-of-a-kind text, experts in credit risk provide a step-by-step guide to building and implementing models both for evaluating applications and managing existing portfolios.
Author: Sylvain Bouteille Publisher: John Wiley & Sons ISBN: 111983564X Category : Business & Economics Languages : en Pages : 423
Book Description
Discover an accessible and comprehensive overview of credit risk management In the newly revised Second Edition of The Handbook of Credit Risk Management: Originating, Assessing, and Managing Credit Exposures, veteran financial risk experts Sylvain Bouteillé and Dr. Diane Coogan-Pushner deliver a holistic roadmap to credit risk management (CRM) ideal for students and the busy professional. The authors have created an accessible and practical CRM resource consistent with a commonly implemented risk management framework. Divided into four sections—Origination, Credit Assessment, Portfolio Management, and Mitigation and Transfer—the book explains why CRM is critical to the success of large institutions and why organizational structure matters. The Second Edition of The Handbook of Credit Risk Management also includes: Newly updated and enriched data, charts, and content Three brand new chapters on consumer finance, state and local credit risk, and sovereign risk New ancillary material designed to support higher education and bank credit training educators, including case studies, quizzes, and slides Perfect for risk managers, corporate treasurers, auditors, and credit risk underwriters, this latest edition of The Handbook of Credit Risk Management will also prove to be an invaluable addition to the libraries of financial analysts, regulators, portfolio managers, and actuaries seeking a comprehensive and up-to-date guide on credit risk management.
Author: Bart Baesens Publisher: John Wiley & Sons ISBN: 1119278341 Category : Business & Economics Languages : en Pages : 516
Book Description
The long-awaited, comprehensive guide to practical credit risk modeling Credit Risk Analytics provides a targeted training guide for risk managers looking to efficiently build or validate in-house models for credit risk management. Combining theory with practice, this book walks you through the fundamentals of credit risk management and shows you how to implement these concepts using the SAS credit risk management program, with helpful code provided. Coverage includes data analysis and preprocessing, credit scoring; PD and LGD estimation and forecasting, low default portfolios, correlation modeling and estimation, validation, implementation of prudential regulation, stress testing of existing modeling concepts, and more, to provide a one-stop tutorial and reference for credit risk analytics. The companion website offers examples of both real and simulated credit portfolio data to help you more easily implement the concepts discussed, and the expert author team provides practical insight on this real-world intersection of finance, statistics, and analytics. SAS is the preferred software for credit risk modeling due to its functionality and ability to process large amounts of data. This book shows you how to exploit the capabilities of this high-powered package to create clean, accurate credit risk management models. Understand the general concepts of credit risk management Validate and stress-test existing models Access working examples based on both real and simulated data Learn useful code for implementing and validating models in SAS Despite the high demand for in-house models, there is little comprehensive training available; practitioners are left to comb through piece-meal resources, executive training courses, and consultancies to cobble together the information they need. This book ends the search by providing a comprehensive, focused resource backed by expert guidance. Credit Risk Analytics is the reference every risk manager needs to streamline the modeling process.
Author: Raymond Anderson Publisher: Oxford University Press ISBN: 0199226407 Category : Business & Economics Languages : en Pages : 790
Book Description
The Credit Scoring Toolkit provides an all-encompassing view of the use of statistical models to assess retail credit risk and provide automated decisions.In eight modules, the book provides frameworks for both theory and practice. It first explores the economic justification and history of Credit Scoring, risk linkages and decision science, statistical and mathematical tools, the assessment of business enterprises, and regulatory issues ranging from data privacy to Basel II. It then provides a practical how-to-guide for scorecard development, including data collection, scorecard implementation, and use within the credit risk management cycle.Including numerous real-life examples and an extensive glossary and bibliography, the text assumes little prior knowledge making it an indispensable desktop reference for graduate students in statistics, business, economics and finance, MBA students, credit risk and financial practitioners.