Term
| Expected Loss formula is: |
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Definition
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Term
| Do bonds have more or less complex lending arrangements than commercial loans? |
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Definition
| less (loans may have covenants, tax and accounting implications that bonds don't have) |
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Term
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Definition
UL can be intrepreted as Std Dev of EL
in any particular period current market conditions can increase or decrease the realised loan loss - UL denotes the variability in potential loan loss around the average expected loss level. |
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Term
| What are the two key factors that impact recovery rates? |
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Definition
| assets seniority and underlying collateral |
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