Rethinking Credit Risk: A Treasury Framework for Resilience
Snapshot:
- In today’s volatile environment, traditional credit risk assessments are no longer enough.
- Layered frameworks that provide a clearer view of risk are essential.
- Insurance and risk transfer solutions also play a vital role offering both downside protection and early warning signals when other defences fall short.
Volatile trading conditions and geopolitical instability mean traditional credit assessments are no longer sufficient to assess credit risk. Treasury teams need layered frameworks to uncover emerging risks and hidden exposures.
To meet this challenge, two frameworks are emerging:
- A three-layered model of credit risk defence
- A likelihood vs impact matrix for prioritising where attention and resources should be deployed
However sophisticated a framework may be, some risks will inevitably escape detection. While no framework can prevent all defaults, credit risk transfer solutions can provide a critical final buffer.
Credit risk is not a static metric but a dynamic exposure that demands active management. Treasury leaders who go beyond static models and adopt layered, adaptive frameworks will be better equipped not only to weather disruptions, but to pursue growth with confidence.
Read our full article to learn more.
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If you would like to learn more about how risk transfer solutions can strengthen your credit risk framework, contact us to start the conversation.
