Introduction to Capital and Pricing
Learning Objectives
By the end of this letter of credit course you will be able to:
Explain how credit risk is identified and measured under the “standardised approach”.
Price trade finance products and transactions in relation to risk weights and capital.
Explain the meaning behind the term asset value correlation.
Explain the estimation of probability of default (PD), and the concepts of loss given default (LGD) and exposure at default (EAD).
Explore the concept of liquidity transfer pricing (LTP).
Describe how to calculate risk weights and capital charges for trade finance products.
Explain the two dimensional risk rating system.
Explore the basic building blocks of the internal ratings based (IRB) approach and the two sub-methods involved.
Describe maturity and how it differs from the actual underlying tenor of transaction.
Complete a series of trade finance product examples to explain various calculations.
Course curriculum
Lessons
In this lesson, you will gain a better understanding of credit risk, risk weights, capital charges and pricing of trade finance products under the standardised approach and the need for regulation of banks in the form of the capital adequacy framework.
In this lesson, you will have an understanding of a two dimensional risk rating system which is the basic building block of the internal ratings based (IRB) approach.
In this lesson, you will gain an understanding of the principal drivers behind the calculation of capital charges. We will also explore the step by step approach to see how these parameters combine to determine expected and unexpected losses.
In this lesson, you will be introduced to the concept of economic capital as being distinct from regulatory capital, the impact of liquidity, and the pricing of trade finance products.
This section will test your knowledge on what you have learned so far and aims to equip you with the skills and context you will need in the field. Please note this is not an exam.
FAQs
Answers to your most commonly asked questions.
This course forms part of the curriculum for the Global Trade Certificate (GTC) but can also be purchased on its own.
If you just complete this course then you will earn a Letter of Completion once you finish (please note there is no exam for this individual course).
However, this course can also be put towards achieving the GTC qualification. More details can be found here.
If you complete the GTC then you will earn a Certificate of Achievement, signed by the ICC Secretary General, once you pass the final exam
A strong interest in trade and trade finance is recommended and all candidates need to be able to read and write in English.
Your purchase includes 12 months to access all the lessons. You can access the lessons as many times as you like within the 12-month access period.
This course is accredited by the London Institute of Banking and Finance (LIBF), The Bankers Association for Finance and Trade (BAFT) and the Global Trade Professionals Alliance (GTPA).
Due to the immediate availability of our course content upon registration, ICC Academy has a strict no-refund policy for our courses and certifications. For more details, please refer to our Terms and Conditions.
This online course will take approximately 3-4 hours to complete depending on your level of experience.
Candidates will have 12 months to complete the lessons.
- One-year access to the online course and all 5 lessons
- 15 assessment questions – we’ll show you how to apply what you learn to real-world scenarios. Please note there is not an exam.
- Eight animated explainer videos
- A printable glossary containing all the key terms for you to refer to throughout the course
- Dedicated, full-time IT support
- Certificate of completion
Yes, all our courses are taken online. This means they are accessible at any time, from anywhere in the world. Learn when and where you want.
This course has been designed for general practitioners working in banks, corporates, or financial institutions in functions such as relationship management, credit and compliance, but with an interest in trade finance.
