Credit Risk

Analyze and manage risk associated with borrowing

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 this risk.

Effective techniques for managing and analyzing risk include creating customized models, performing Monte Carlo simulations, designing credit derivatives, and analyzing scenarios to assess risk exposure arising from borrowing or lending.

For more information, see Statistics and Machine Learning Toolbox and Financial Toolbox.

Examples and How To

Software Reference

See also: risk management, Monte Carlo simulation, liquidity risk, credit risk videos