Financial Products & Associated Risk Management

Credit Risk Customer Management - Part 2


This eCourse consists of two modules. Module 1 covers the fact that a bank has to consider both the needs of its customers and how meeting those needs can give rise to risks that the bank needs to identify, assess, and accept/mitigate.

Module 2: at covenants that are included by banks and other lenders in credit facility agreements. It describes the various types of covenant that are used, with particular focus on financial covenants, which are the most exacting type. The actions required to deal with both potential and actual breaches of covenants are also outlined.

The second part of Module 2 looks at credit decisions and how they are made. The importance of credit authority levels in making such decisions is described in some detail.


On completion of this course, you will be able to:
- Identify the main determinants of customer needs for credit facilities and how banks structure facilities to meet those needs
- Recognize the risks, both credit and noncredit, that arise when structuring credit facilities, including the risks associated with foreign currency facilities and non-amortizing structures
- Identify the different types of covenant, why they are necessary, and the issues involved in monitoring them and managing any breaches
- Recognize the crucial nature of the decision to accept credit risk, and the need for such decisions to be made by the appropriate credit authority


Module 1: Credit Risk Customer Management - Structuring Credit Facilities
Topic 1: Facility Structures & Customer Needs
Topic 2: Facility Structures & Risk

Module 2: Credit Risk Customer Management - Covenants & Credit Decisions
Topic 1: Covenants
Topic 2: Credit Decisions


Relevant Subject
SFC:2.00, PWMA:2.00
Staff of Corporate Member: HK$610
Non-Member: HK$890
All Member: HK$610