From this chapter you will have learned:

  1. The identification of risk and the major market forces that affect the economy and have a domino effect on bank risk.
  2. Why retail credit is more profitable and lower risk than corporate credit.
  3. The different classifications of retail credit that enable product developers to design better products that meet the needs of every category of borrower.
  4. The different types of risk a bank faces and the reasons behind each type of risk.
  5. The difference between expected losses and unexpected losses and how to calculate the expected loss.