Author: Evispot

Probability of Default (PD)

Probability of Default is the likelihood over a specified period, usually one year, that a borrower will not be able to make scheduled repayments. It can be applied to a variety of different risk management or credit analysis scenarios. Sometimes...

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Loss Given Default (LGD)

Loss given default (LGD) is the amount of money a bank or other financial institution loses when a borrower defaults on a loan, depicted as a percentage of total exposure at the time of default. A financial institution’s total LGD is calculated after...

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Exposure at Default (EAD)

Exposure at default (EAD) is the total value a bank is exposed to when a loan defaults. Using the internal ratings-based (IRB) approach, financial institutions calculate their risk. Banks often use internal risk management default models to estimate...

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Machine learning in credit decisions

Leveraging machine learning for smarter lending and obtain insights into the technology behind 100% transparent machine learning models.

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