
Contents
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1.1 Debt versus Credit 1.1 Debt versus Credit
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1.2 Intelligence! 1.2 Intelligence!
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1.2.1 Individual Intelligence 1.2.1 Individual Intelligence
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1.2.2 Collective Intelligence 1.2.2 Collective Intelligence
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1.2.3 Intelligence Agencies 1.2.3 Intelligence Agencies
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1.2.4 Intelligence Cycle 1.2.4 Intelligence Cycle
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1.3 The Risk Lexicon 1.3 The Risk Lexicon
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1.3.1 What is…? 1.3.1 What is…?
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1.3.1.1 Credit Intelligence 1.3.1.1 Credit Intelligence
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1.3.1.2 Credit risk 1.3.1.2 Credit risk
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1.3.2 The Risk Universe 1.3.2 The Risk Universe
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1.3.2.1 Business Risk 1.3.2.1 Business Risk
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1.3.2.2 Risk by Nature 1.3.2.2 Risk by Nature
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1.3.2.3 Rumsfeld Matrix 1.3.2.3 Rumsfeld Matrix
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1.3.2.4 Black Swans and Other Strange Creatures 1.3.2.4 Black Swans and Other Strange Creatures
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1.3.3 Measure 1.3.3 Measure
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1.3.3.1 Assess, Measure, Communicate 1.3.3.1 Assess, Measure, Communicate
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1.3.3.2 Time Horizons 1.3.3.2 Time Horizons
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1.3.3.3 Desired Rating Properties 1.3.3.3 Desired Rating Properties
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1.3.4 Beware of Fallacies 1.3.4 Beware of Fallacies
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1.3.4.1 Argument 1.3.4.1 Argument
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1.3.4.2 Evidence 1.3.4.2 Evidence
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1.3.4.3 Appeals 1.3.4.3 Appeals
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1.4 The Moneylender 1.4 The Moneylender
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1.4.1 Credit’s 5 Cs 1.4.1 Credit’s 5 Cs
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1.4.2 Borrowings and Structure 1.4.2 Borrowings and Structure
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1.4.3 Engagement 1.4.3 Engagement
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1.4.3.1 Relationship Lending 1.4.3.1 Relationship Lending
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1.4.3.2 Transactional 1.4.3.2 Transactional
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1.4.3.3 Providers—Benefits or Not 1.4.3.3 Providers—Benefits or Not
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1.4.3.4 Customers—Benefits or Not 1.4.3.4 Customers—Benefits or Not
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1.4.4 Retail versus Wholesale 1.4.4 Retail versus Wholesale
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1.4.4.1 Wholesale 1.4.4.1 Wholesale
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1.4.4.2 Retail 1.4.4.2 Retail
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1.4.4.3 Grade Presentation 1.4.4.3 Grade Presentation
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1.4.4.4 From Rules and Judgment to Models 1.4.4.4 From Rules and Judgment to Models
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1.4.4.5 Empirical Ratings 1.4.4.5 Empirical Ratings
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1.4.5 Risk-Based Pricing (RBP) 1.4.5 Risk-Based Pricing (RBP)
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1.5 Summary 1.5 Summary
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Questions—Introduction to Credit Scoring Questions—Introduction to Credit Scoring
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Cite
Abstract
Background behind ‘Credit Intelligence’ and sets the scene. (1) Debt versus credit—terms that in modern usage are considered synonymous, even though the former implies trust and the latter obligation, with coverage of shifts from rating grades to scores. (2) Intelligence—positioned like ‘national-’ and ‘military-’ intelligence, beyond individual and collective intelligence to intelligence agencies and the intelligence cycle. (3) Risk lexicon—positions credit risk within the broader business-risk universe. Deeper delving is done into universal and idiosyncratic risks (Rumsfeld matrix, Black Swans and other colourful animals, volatile, uncertain, complex and ambiguous (VUCA) world), risk assessment and communication plus fallacies and how they relate to empirical methods. (4) Moneylender—and risk assessment. It covers credit’s 5 Cs, economic concepts {e.g. asymmetric information} and the types of lending, and greater detail on engagement between lender and borrower {relationship/transactional, retail/wholesale}, the different rating approaches used in those environments and brief coverage of risk-based pricing.
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