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Core and noncore loans - Crouhy, Chapter 12 - The Credit Transfer Markets - and Their Implications


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Anyone who is willing to opine,

Please see the excerpt from Crouhy et al below from chapter 12. Perhaps I'm thinking too deep into this, but why are the noncore loans better managed by the "credit portfolio management group" and the core loans managed by the business units? One would assume that all loans should be managed by the credit portfolio management group for credit related exposures whether they are core or noncore. It could be that I'm reading this wrong as well ( been reading a lot lately).

By contrast, under the originate-to-distribute business model, loans are divided into core loans that the bank holds over the long term (often for relationship reasons) and noncore loans that the bank would like to sell or hedge. Core loans are managed by the business unit, while noncore loans are transfer-priced to the credit portfolio management group. For noncore loans, the credit portfolio management unit is the vital link between the bank’s origination activities (making loans) and the increasingly liquid global markets in credit risk