Hi David,

In Slide 97 of Credit risk A are you using word committments loosely for unused committments?

Anil

Hi Anil

Yes, guilty as charged. Ong does this in the reading and it has caused confusion so I *meant* to be careful about not replicating the confusion.

Generally in Ong, as the *drawn portion* of the commitment (COM) becomes outstanding (OS), we are generally referring to the unused (or remaining) commitment.

e.g., V = 0S + COM should really be: V = OS + unused COM

and

AE = OS + alpha * COM would be better if:
AE = OS + alpha * unused COM

Thanks!

David