This course introduces the concept of Haircut Adequacy Assessment within the Commercial Vehicle Retail Credit framework. It focuses on evaluating whether proposed haircuts adequately 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 clear documentation of 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 documentation standards, exception handling, and escalation for review within the credit approval process.