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