Today's financial market witnesses the strong development of financial and non-financial institutions, accompanied by the urgent need for credit risk management. Accurate measurement of this risk plays a pivotal role in ensuring safety and stability for the operations of lending institutions.
To build modern credit risk measurement and assessment tools according to the Internal Rating Based Approach (IRB – Internal Rating Based Approach), banks choose to implement the Basel Accord on “international capital standards”. In which, credit risk measurement plays an important role in estimating losses and the required reserve capital.
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