Scenario Forecasting for Bank Credit Risk Evaluation

Abstract

The article covers the methods of potential debtors credit risk estimation used by credit organizations. Particular attention is paid to scoring models and their disadvantages. Methods based on the combination of scenario approaches and experts’ dynamic ranking depending on their past forecasts reliability are used in this article. It is suggested to use these methods in the alternative analysis approaches taking into consideration subjective debtors’ characteristics and economic changes.

Keywords:

scoring model, scenario analysis, potential debtor’s estimation, expert valuation