Objectives On completion of this tutorial, you will be able to:

• Recognize the importance of sound credit risk management within banks
• Identify the common failings of banks in relation to managing credit risk

Tutorial Overview There are many reasons why banks need to manage credit risk appropriately. At a broad level, it is the main risk that most banks face and the one against which they must hold the most capital. However, despite the critical importance of credit risk, there are many common failures when it comes to its management. This tutorial describes in detail the reasons why managing credit risk is so important to banks, from low margins on loan products to making the best use of scarce capital resources. The tutorial also details the common failings of banks when it comes to managing credit risk, including not heeding the lessons learned from previous events to a tendency to look at situations from a single risk perspective. Prerequisite Knowledge Credit Risk - Lessons from the Financial Crisis Tutorial Level: Intermediate Tutorial Duration: 60 minutes