Tag Archive for expected loss

Risk Assessment

Written by: Arijit Bhowmick Complete Credit Risk Assessment can be performed by precise loan pricing, more accurate loss forecasting, better evaluation of investment and disinvestment options, optimal portfolio management. Inaccurate loan-loss provisioning causes a level of “lazy capital” i.e. capital not…

Expected Loss (EL) Calculation

Lending institutions need to understand the loss that can be incurred as a result of lending to a company that may default; this is known as expected loss (EL).  EL can be expressed as a simple formula: EL = PD…