This course introduces the concept of Capital Lock-in Risk within the Commercial Vehicle Retail Credit framework. It focuses on assessing the risk of capital being tied up for extended periods in distressed or illiquid exposures, impacting liquidity, redeployment, and overall portfolio efficiency.
Learners will explore key assessment dimensions such as correlation effects, systemic risks in distressed assets, borrower viability, and asset valuation, with an emphasis on independent validation and well-documented rationale. The course also distinguishes capital lock-in risk from broader portfolio diversification strategies, highlighting its specific role in identifying exposure-level constraints, prolonged recovery timelines, and concentration risks.
By the end of the course, participants will understand how to evaluate capital lock-in risk in practice, particularly within Portfolio Concentration and Systemic Risk, including validation of team-level analysis, approval of case recommendations, management of segment-level exposure, and escalation to the credit committee where required.