Generalized beta regression models for random loss given default

Xinzheng Huang, Cornelis W. Oosterlee

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

A framework for modeling systematic risk in loss given default in the context of credit portfolio losses is described in this paper. The class of models is very flexible and accommodates skewness and heteroskedastic errors well. The inference of models in this framework can be unified. Moreover, it allows efficient numerical procedures, such as the normal approximation and the saddlepoint approximation, to calculate the portfolio loss distribution, value-at-risk and expected shortfall.

Original languageEnglish
Pages (from-to)45-70
Number of pages26
JournalJournal of Credit Risk
Volume7
Issue number4
DOIs
Publication statusPublished - Dec 2011
Externally publishedYes

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