Credit risk is the potential for a loss when a borrower cannot make payments as obligated to a lender. Credit risk is commonly measured and communicated as the likelihood or probability of an individual borrower’s default. Most lenders employ sophisticated models to analyze risk, rank customers, and decide on appropriate strategies for managing credit risk.
Leading financial institutions use MATLAB to build models that manage credit risk. With Statistics Toolbox and Financial Toolbox, you can build customized credit risk models, perform Monte Carlo simulations, design credit derivatives and analyze scenarios to assess risk exposure arising from borrowing or lending.