This book is present about why new approaches to credit risk measurement and management, traditional approaches to credit risk measurement, loans as options and the KMV model, the VAR approach : The Mckinsy Model and other models, risk-neutral valuation approach : KPMG's Loan Analysis System (LAS) and the CSFP Credit Risk Plus Model, a summary and comparison of new internal model approaches, an overview of modern portfolio theory and its application to loan portfolios, loan portfolio selection and risk measurement, back-testing and stress-testing credit risk models, RAROC models, off-balance-sheet credit risk and credit derivatives