Recent crises showed, that no business is safe and even if your business is safeguarded if a risky business is connected to yours, its collapse could well lead to the downfall of your operation. In recent years businesses are facing increasingly strict legislation and heightened requirements for good governance, risk management and accountability. In the decade since the financial crisis, credit risk has gone from being a brushed off part of doing business to a strategic measure.

This course will deal with the following topics:

• What is credit risk and why is it important?
• What drives credit risk?
• How can credit risk be analyzed using rating technology and financial data?
• How can credit risk be measured?
• How can credit risk be managed?

The aim of this course is to introduce students to credit risk. Upon completion of the course students will 

• have a theoretical understanding of credit risk
• be familiar with the different sources for credit risk both for financial and non-financial companies
• be able to quantify credit risk based on credit risk measures
• be able to interpret credit risk measures both on a quantitative as well as qualitative level
• have a basic understanding of how credit risk can be managed

For this course, participation is mandatory. Students are allowed to miss a maximum of 30% (i.e. two double-classes each of which is lasting 2 times 90/120 minutes) without having to bring any excuse note, medical testimony etc.

The teaching approach is based on a mix of methods that includes self study, Q&A Sessions, class discussions, numerical examples, mandatory homework exercises, and a final exam.

Homework Exercise A (15%)

Homework Exercise B (15%)

Final Exam (70%)

Grading scale (in points)

 >= 87,5      1

 75-87,5      2

 62,5-75      3

 50-62,5      4

 < 50           5