The CreditManager simulation enables participants to gain practical experience in the challenges of making credit decisions and managing a credit portfolio in a competitive and dynamic environment. All of the elements of a real credit decision environment are featured in the CreditManager simulation.
After the CreditManager simulation, the participants will be able to recognise the consequences of the Basel rules and the importance of economic capital. They will also be able to calculate and use financial ratios and ratings, evaluate covenants, collateral, and assess – and take – credit risk.
The CreditManager simulation is usually played in groups. Each group consists of three to five people, each member representing a role in the credit risk department of a bank. Each group sets its own risk strategy, organises its work and uses credit risk tools to make decisions with regard to credit proposals and credit portfolio management. The CreditManager simulation takes place in a competitive environment where Return on Economic Capital (similar to RAROC) is the main measurement of success.
Key issues covered
- Basel I, II and III and various capital definitions
- Risk assessment and rating
- Risk process and limits
- Pricing, covenants and collateral
- Loan products and exit possibilities
- Credit portfolio management
The duration of the CreditManager simulation is usually three days. The duration can be shortened or extended depending on the purpose of the CreditManager simulation and the experience level of the participants. Tailor-made scenarios can be provided.
To prepare for the CreditManager simulation, the participants can obtain additional theoretical knowledge regarding risk concepts, either by e-learning or in a preceding training session.
The CreditManager simulation may be preceded by a 3-5 day Enterprise Credit Risk Course, where the participants acquire a deeper (theoretical) understanding of credit and financial analyses of corporates.
After each CreditManager simulation session an overall evaluation (optional) can be conducted in which the participants will address and evaluate:
- Performance (Return on Economic Capital as well as profit & loss)
- Risk profile and commercial issues
- Limit setting and usage of limits
- Group organisation and working methods
- Interpretation of and reaction to news