About LGD Modeling Approach

[ertr]

Hello,

Since there is no topic about modeling approaches, I am asking my question under this topic. My question will be about LGD modeling. We have some input variables for Loss Rate calculation in LGD modeling. These are;

• 
  Payment: Monthly regular payments of the loan
  Indirect cost
  Direct cost
  Drawings

Can you explain with examples for the parts other than Payment?

Also, can you explain how Discounting is calculated?
Is there a similar web platform where I can ask such questions?

Thank you

[PaigeMiller]

What is LGD?

[yot]

LGD is Loss Given Default.

[SASKiwi]

I assume you are referring to Loss Given Default in relation to the Advanced Internal Rating Based (AIRB) approach to the Basel II/III/IV banking standards. If so then unfortunately I don't believe there is a one-size-fits-all answer to this. This is because each country usually has their own rules regarding an AIRB approach and also IFRS-type accounting rules may also apply. You would be better off posing these types of questions to the modelling specialists and accounting experts in your organisation.   

[ertr]

Yes, I meant Loss Given Default. 

I asked if I could get information about what I wrote above in general terms. Apart from that, I wanted to ask if there are any platforms where I can get such information.

[SASKiwi]

@ertr - Wikipedia has quite a nice writeup of this: https://en.wikipedia.org/wiki/Loss_given_default