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 credit exposures, potentially limiting redeployment and impacting 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 clear documentation of rationale. The course also distinguishes capital lock-in risk from broader portfolio diversification strategies, highlighting its specific role in identifying exposure-level constraints, liquidity impacts, and prolonged recovery timelines.
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 documentation standards, exception handling, and escalation for review within the credit approval process.