Tag: Credit Risk
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Demystifying Credit Risk: Understanding Probability of Default (PD), Loss Given Default (LGD), and Exposure at Default (EAD)
In the world of credit risk modeling and financial risk management, three key metrics help financial institutions assess and manage their credit risk exposure: Probability of Default (PD), Loss Given Default (LGD), and Exposure at Default (EAD). These metrics are fundamental in the calculation of expected credit loss (ECL) and regulatory capital requirements under frameworks…