What Tools and Techniques are Used in Credit Risk Management?
Various tools and techniques are employed in credit risk management, including:
Credit Scoring Models: Quantitative models that predict the likelihood of default based on historical data. Credit Default Swaps (CDS): Financial derivatives that transfer the credit risk of a borrower to another party. Credit Risk Software: Specialized software solutions that help businesses assess and manage credit risk. Stress Testing: Simulating extreme economic scenarios to evaluate the resilience of a credit portfolio.