Credit risk management in an asset-based lending environment Loans Finance & Mortgage

Credit risk management in an asset-based lending environment

The need to monitor the performance of collateral on an ongoing basis makes asset-based lending labor intensive, often requiring a significant investment in information systems and specialized personnel who have intimate knowledge of the borrower's business. Here is how it's handled at GMAC.

Credit risk management has improved with age. In the past 10 years, in fact, improved analytics, derivative and structured credit products, and growing liquidity for loans in the secondary market have brought a healthy glow to the field. And now techniques long used for managing large corporate borrowers are successfully being applied to middle-market lending.

Financial services companies--such as GMAC, whose portfolio of commercial credit risk is made up primarily of asset-based loans (ABL)--face particular challenges that require a slightly modified approach to measuring and monitoring credit risk. Unlike traditional cash-flow-based bank loans, ABL relies less on the borrower's financial and operational performance and more on the quality of the underlying collateral.(Continue Reading)

Credit risk management in an asset-based lending environment
The need to monitor the performance of collateral on an ongoing basis makes asset-based lending labor intensive, often requiring a significant investment ...(Continue Reading)

SBA, The Hartford co-sponsor risk management tools
SBA, The Hartford co-sponsor risk management tools.(risk management education)(Small Business Administration)(www.sba.gov)(Continue Reading)

Highlights of the RMA Risk Management Conference
Attendance was high at RMA's 2003 Risk Management Conference, which took place in October at Baltimore's sparkling Inner Harbor. Keynote addresses were ...(Continue Reading)

RMA—The Risk Management Association thanks member institution contributors to the 2003-2004 Statement Studies Data Submissions Program
Alabama AmSouth Bank Citizens Bank & Savings Co. Compass Bank Regions Financial Corp. Southland Bank SouthTrust Bank Alaska Northrim ...(Continue Reading)

The Federal Reserve Bank of Philadelphia implements its own process for enterprise risk management
In 2003, the Federal Reserve System emphasized the importance of risk management by creating an ERM guidance document providing direction and defining ...(Continue Reading)