Trade Credit and Risk Management

✍ Scribed by Lucia Gibilaro (author)

• Publisher: Business Expert Press
• Year: 2018
• Tongue: English
• Leaves: 163
• Category: Library

✦ Synopsis

This book offers managers a complete analysis of the various issues of credit risk management for trade credit financing instruments supported by applications to various types of markets and presents an analysis on risks associated with trade credit in supply chains.

Trade credit finance is characterized by strong attractiveness deriving from risk mitigation, but the plurality of sources of credit risk (default and dilution risk) requires the implementation of a credit risk management system that exploits the broad knowledge developed by financing supply relationships. Consequently, financiers could be hindered from developing a full understanding of the underwritten risks and are thus unable or only partially able to evaluate their full potential to expand financial relationships over the credit capability of a single counterparty with respect to the supplier-debtor pair.

The richness of the information available in trade credit financing is not an obstacle for the development of a modern risk management framework, but it must be calibrated to avoid distortions in the implementation. In addition, risk analysis in the supply chain is not limited to the crises of individual members but must assess the effects of such crisis on the entire supply chain and assess the specific risks of contagion and the favorable conditions for the propagation. This book offers managers a complete analysis of the various issues of credit risk management for trade credit financing instruments supported by applications to various types of markets and presents an analysis on risks associated with trade credit in supply chains.

✦ Table of Contents

Cover
Trade Credit and Risk
Management
Dedication
Brief Contents
Contents
Introduction
Chapter 1: Risk Management for Trade Credit Financing Instruments
Introduction
Trade Credit Financing and Credit Risk Exposure
An Internal Rating System for Trade Credit Financing Instruments
An Internal Rating System for Exposures Based on Purchased/Assigned Trade Receivables
An Internal Rating System for Exposures Backed by Trade Receivables
Credit Risk Parameters: Theoretical Features and Empirical Evidence
Default Risk
Probability Default
Loss Given Default
Exposure at Default
Maturity
Dilution Risk
Concentration Risk: Alternative Approaches and Empirical Evidence
Conclusions
Chapter 2: Application of Credit Risk Measures to Internal Processes
Introduction
Credit Risk Origination
Credit Risk Control
Credit Risk Management
Conclusions
Chapter 3: Trade Credit Instruments in Capital Adequacy Regulation
Introduction
Credit Risk Capital Requirements: A Holistic View
Trade Credit Financing Instruments under theStandardized Methodology
Trade Credit Financing Instruments under the IRB Methodology
Exposures Based on Purchased Trade Credits
Exposures Collateralized by Trade Credits
Capital Regulation on Large Exposures
Conclusions
Chapter 4: Risk Mitigation of Trade Credit and Distress along the Supply Chain
Introduction
Literature Background
Data
Methodology
Empirical Results.
Conclusions
Conclusions
References
Annex
About the Author
Index
Ad Page
Back Cover