Credit Engineering for Bankers: A Practical Guide for Bank Lending Book

Foreword xi

Introduction xvii

About The Authors xxiii

Part 1 New Approaches to Fundamental Analysis 1

1 Introduction to Loan Decision Making: The Prism Model 3

2 International Financial Reporting Standards 17

3 Multivariate Ratio Analysis 37

4 Credit Analysis of Seasonal Businesses: An Integrated Approach 61

5 Asset-based Lending 79

6 Cash Flow Analysis 99

7 A Primer on Quantitative Risk Analysis 129

8 Projections and Risk Assessment 185

9 Sustainable Growth and Credit Risk Management 237

10 Specialized Lending Risk Rating 253

11 Recognition, Diagnosis, and Response to Troubled Loans 269

12 Strategic Real Options Analysis: Managing Risk Through Flexibility 295

Part 2 Credit Administration 309

13 Capital Adequacy 311

14 Quantitative Credit and Market Risk Analysis 333

15 Portfolio Optimization and Management of Default Risk 377

16 Options Valuation 409

17 Exotic Options, Options Engineering, and Credit Risk 431

18 Credit and Debt Valuation 453

19 Building Integrated Exposure Systems 469

20 Building Risk-Adjusted Pricing Models 489

Index 507