You are currently browsing the category archive for the ‘Weather’ category.
A friend of mine has sent me through this presentation
on modelling credit risk on weather-related portfolios. These ones are
typically difficult to model as they rely less on the actual credit
history of the borrower (although that is still important) and more on
random events that are beyond the control of the obligor.
Normally, these matter to banks with considerable agricultural lending, but they can also be relevant to banks with considerable mining exposure, particularly in environments with extreme weather variation.
I hope it is useful.