Training course on Credit Risk Management for Financial Institutions overseen by Central Banks

Module 1: Introduction to Credit Risk

Defining credit risk and its role in financial stability

Types of credit exposures (retail, corporate, sovereign, interbank)

Key lessons from past credit crises

Module 2: Credit Risk Measurement and Modeling

Probability of default (PD), loss given default (LGD), exposure at default (EAD)

Credit scoring models and internal rating systems

Portfolio credit risk models (CreditMetrics, KMV, CreditRisk+)

Module 3: Loan Portfolio Management

Diversification, concentration risk, and sectoral exposures

Non-performing loans (NPLs) and provisioning

Early warning indicators and credit risk monitoring tools

Module 4: Stress Testing and Scenario Analysis

Role of stress testing in central bank oversight

Designing macro-financial scenarios

Credit risk stress testing methodologies

Module 5: Regulatory Frameworks and Prudential Standards

Basel accords: capital requirements and credit risk mitigation

Standardized vs. Internal Ratings-Based (IRB) approaches

IFRS 9 expected credit loss (ECL) framework

Module 6: Credit Risk and Systemic Stability

Credit booms, bubbles, and financial crises

Macroprudential tools to address credit risk buildup

Central bank role in crisis prevention and resolution

Module 7: Supervisory Approaches to Credit Risk

On-site and off-site credit risk supervision

Risk-based supervision frameworks

Supervisory assessment of bank credit risk management practices

Module 8: Risk Mitigation Tools and Best Practices

Collateral management and guarantees

Credit derivatives and securitization

Loan restructuring and resolution strategies

Module 9: Emerging Issues in Credit Risk

Credit risk in fintech lending and peer-to-peer platforms

ESG factors and climate-related credit risks

Credit risk under digital transformation and big data analytics

Module 10: Case Studies and Lessons Learned

Global financial crisis and sovereign debt crises

Case studies of NPL management in emerging markets

Supervisory responses to credit risk shocks (COVID-19, geopolitical risks)

Module 11: Practical Workshop

Hands-on credit portfolio analysis using real/simulated data

Credit risk stress testing exercise

Group presentations and supervisory recommendations

Module 12: Capstone Project

Drafting a supervisory report on a financial institution’s credit risk profile

Proposing risk mitigation and policy measures

Final feedback and evaluation