The Federation of Emirates Banks organized a lecture given by Professor Edward Altman, Professor of Finance at New York University, the global expert in the field of risk management and the developer of the theory (Z Score / Z Value), with the participation of a large number of officials and employees of the member banks of the Federation of Emirates Banks and from Those interested in the financial sector.
Professor Edward Altman reviewed his definition of the so-called ghost companies that are able to continue operating for a relatively long period despite their inability to achieve profits or fulfill their obligations, and dealt with the factors that support these companies and how to apply credit risk management models to them, and reviewed the applications of the Z Value model used in Most banks in more than 20 countries during the period between 1990 and 2021.
The global financial expert discussed ways to develop resilience capabilities for companies and economic institutions, the current situation in the credit cycle, factors that help determine the stages of the credit cycle, and special expectations associated with high interest rates for bonds. He also touched on the rate of non-performing loans in Europe, the United States, China, debt returns, and positive and negative factors in each credit cycle.
Professor Edward Altmann discussed the Z-Score models for credit risk management and bankruptcy hedging, which he personally developed over five decades, highlighting the comparison in these models between 2019 and 2022.
Since the introduction of Z-Score models at the end of the sixties of the twentieth century, it continues to be widely applied in many economic sectors in developed and emerging markets, as financial experts work to develop and adopt many new methods of risk management.
Jamal Saleh, General Manager of the Emirates Banks Federation, said: “The organization of this lecture, which was presented by Professor Edward Altman, a distinguished international expert whose research we studied during our university studies, comes as part of the Emirates Banks Federation’s efforts to spread awareness among the employees of member banks in the Federation and to provide appropriate platforms for the exchange of ideas.” And opinions that contribute to the development of banking work to contribute to economic development in the country, under the direct supervision of the Central Bank of the United Arab Emirates.
He added: “The current period is witnessing many challenges imposed on us by a new geopolitical reality, in addition to the exposure of some American and European financial institutions to difficulties that have reached the point of bankruptcies in global markets, especially those related to encrypted work in America, which required the union to study the reasons behind it.” This has led to ways to enhance our risk management frameworks.”
