Managing Bank Risk: An Introduction to Broad-Base Credit Engineering

**Master Bank Risk Management with Cutting-Edge Credit Engineering Techniques** Navigate the complexities of modern banking with "Managing Bank Risk: An Introduction to Broad-Base Credit Engineering" by Morton Glantz. This comprehensive hardcover guide, published by Academic Press in 2002, offers a robust framework for understanding and mitigating credit risk in today's dynamic financial landscape. Spanning 688 pages, this first edition equips professionals and graduate students alike with the tools and knowledge necessary to build a sound credit risk environment, refine credit granting processes, and implement appropriate administrative and monitoring controls. Morton Glantz, a recognized expert in the field, goes beyond traditional credit risk management principles, reformulating them with contemporary best practices in portfolio management. This book doesn't just present theory; it provides actionable strategies and risk-measuring tools, both in print and electronic formats, ensuring that credit decisions align with bank policy and regulatory requirements. Bankers gain the crucial data they need to accurately assess asset quality and value. "Managing Bank Risk" is strategically divided into two core sections: "New Approaches to Fundamental Analysis" and "Credit Administration." These sections reveal how to integrate cutting-edge tools like credit derivatives, cash flow computer modeling, distress prediction, interactive risk rating models, and probabilistic default screening with established controls. The book emphasizes practical application, showcasing how to leverage these advanced techniques to optimize credit portfolios and minimize potential losses. A key strength of this book lies in its adherence to the guidelines established by the Basel Committee on Banking Supervision. This ensures that the models, programs, and documents presented are not only theoretically sound but also practically relevant for meeting regulatory demands and maintaining a robust risk management framework. The included CD-ROM is a treasure trove of interactive models, including a 10-point risk rating model, a comprehensive cash flow model, a trial version of CB Pro (a time-series forecasting program), and a stochastic net borrowed funds pricing model. It also features valuable asset-based lending models courtesy of the Federal Reserve Bank, the Uniform Financial Institutions Rating System (CAMELS), and portfolio optimization software models. Further expanding the resources, you get a library of documents from leading organizations like the International Swap Dealers Association and the Basel Committee on Banking Supervision. This book is particularly valuable for individuals working in lending industries and graduate students pursuing studies in commercial banking, financial accounting, financial intermediation, financial studies, and international finance. The key features, including chapter-concluding questions, case studies that illustrate major tools, and the EDF Credit Measure provided by KMV (a leading provider of market-based quantitative credit risk products), enhance the learning experience. The included library of internet links further directs you to critical information on rapidly evolving credit disciplines, from portfolio management and credit derivatives to risk rating and financial analysis. **Specifically, this book delves into crucial credit engineering tools, including:** * Statistics and simulation-driven forecasting for more accurate predictions. * Risk-adjusted pricing strategies to optimize profitability while mitigating risk. * The use of credit derivatives to hedge exposures and enhance portfolio diversification. * Key financial ratios for identifying potential credit risks. * Sophisticated cash flow computer modeling for stress-testing loan portfolios. * Techniques for distress prediction and effective workout strategies. * Capital allocation models to optimize resource allocation and maximize returns. * Credit exposure systems for monitoring and managing aggregate risk. * Computerized loan pricing methodologies for competitive and profitable lending. * Strategies for achieving sustainable growth while maintaining credit quality. * Interactive risk rating models for consistent and objective credit assessments. * Probabilistic default screening to identify high-risk borrowers. "Managing Bank Risk" offers a blend of theoretical insights and practical application, cementing its place as an indispensable resource for anyone seeking to master the art and science of credit risk management in the modern banking environment. Whether you are a seasoned professional or a student eager to break into the field, this book will provide you with the knowledge and tools you need to succeed.