This course introduces the concept of Haircut Adequacy Assessment within the Commercial Vehicle Retail Credit framework. It focuses on evaluating whether proposed haircuts accurately reflect the underlying risk, recovery expectations, and potential losses associated with distressed credit exposures.
Learners will explore key assessment dimensions such as time horizon, execution risk, borrower viability, and asset valuation, with an emphasis on independent validation and well-documented rationale. The course also distinguishes haircut adequacy assessment from broader portfolio diversification strategies, highlighting its specific role in determining whether risk adjustments are sufficient at the individual exposure level.
By the end of the course, participants will understand how to apply haircut adequacy assessment in practice, particularly within Pricing, Haircut, and Risk Compensation, including validation of team-level analysis, approval of case recommendations, management of segment-level exposure, and escalation to the credit committee where required.