Credit Risk Appetite - Part 2
Credit risk appetite varies considerably by customer type. Credit extended to a customer must comply with the lender’s credit risk appetite – proposals outside appetite may be approved, but only exceptionally.
Banks also need to manage industry risk – the risk that companies in a particular industry will be negatively impacted by various internal and external factors.
This tutorial looks at how banks identify, manage, and mitigate both customer and industry risk.
On completion of this tutorial, you will be able to:
- Describe how credit risk appetite differs depending on the customer type
- Explain how banks identify and manage industry risk
Topic 1: Customer Risks
Topic 2: Industry Risk