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

• Distinguish between the different types of credit risk, including the difference between direct and contingent credit risks as well as those that arise from settlement, trading, and underwriting activities
• Recognize the different credit risk customer types and the importance of differentiating between these customer types
• Identify how credit risk arises in both the banking book and the trading book and the significance of this distinction
• List the different types of asset class as defined by regulators

Tutorial Overview Banks must have appropriate risk management frameworks and personnel in place to deal with many different types of credit risk. This tutorial describes these different risk types and the characteristics that determine whether a particular credit risk falls into one risk type or another. It goes beyond the credit risks that arise in the traditional banking book to examine those that arise in the trading book and the regulatory and risk management implications of this distinction. The tutorial also describes in detail how banks segment different customer types and why this differentiation matters from a credit risk point of view. Prerequisite Knowledge Credit Risk - An Introduction Tutorial Level: Intermediate Tutorial Duration: 60 minutes