4.0

credits

Average Course Rating

Although the size of credit markets varies across countries, reflecting the level of economic development, its industrial structure and its regulatory regime, globally, credit markets are huge, surpassing by far equity markets as a source of finance for both the private and public sectors. McKinsey estimates that, in 2007, total global financial assets were $225 trillion, of which only $50 trillion was equity, the remainder represented various types of credit instruments. The recent Global Financial Crisis had a significant impact on credit markets, something that will be discussed repeatedly during the course. This course will examine credit markets globally, with a specific focus on understanding the particular nature of credit risk. After an overview and definitions, the mathematics of fixed income instruments will be covered. There will then follow two sections on private sector credit risk, one each for the real and banking sectors. A significant part of the course will then incorporate what has been learned in analyzing private sector credit into a discussion of sovereign credit risk. This course is open to enrollment by MIEF students only.