Loan-value

Working in the banking industry I was turned on to this book by a colleague and what a colossal waste of time reading this was. The vast majority of this book's models are outdated and if Mr. Saunders was trying to write a historical piece he has accomplished that in spades. Nothing in this book is relevant and it is obvious the esteemed Mr. Saunders lent his name to a very poor book that he probably should have glanced through if not read. Linda Allen should probably get some real world experience because she is wasting people's time with her research.

This book reviews concepts that have been around for more than 10 years and well published in articles. Perhaps it pulls it all together in book form, but even so, it is dated. It is light on credit derivatives and the exploding market in synthetic securitizations driven by credit derivatives. These products introduce structured credit risk (and hedges) to banks and investors.

The reader will need to buy "Credit Derivatives and Synthetic Structures" by Tavakoli to get insight into these products.

I have a copy of this book. It covers popular credit risk models and things like RAROC, etc. These concepts have been discussed extensively in the industry but I assume this is the first in the book form. The book does a good job in presenting basic ideas. However, if you are looking for technical details, you best bets are still the original technical documentations (CreditMetrics, CreditRisk+, KMV, etc). Nevertheless this book is a useful survey of the current stable of models. Besides, it is not very expensive.