LGD Recovery Cash Flows, Workout Costs, and Discounting
Learn which post-default recoveries and collection costs belong in LGD, how to discount them, and why IFRS 9, Basel IRB, and internal LGD measures can differ.
Credit risk topic
Loss given default (LGD)
Measure discounted losses after recovery, costs, and collateral.
Guides and worked examples
Discounted net recoveries and workout LGD
Measure loss from cash-flow shortfalls, recovery costs, and timing after default.
Workout LGD and market LGD
Compare observed recovery cash flows with market-price proxies and understand their limits.
Collateral, haircuts, and downturn LGD
Translate security into plausible net cash recovery instead of treating collateral value as cash.
Cure, re-default, and recovery timing
Build transparent default episodes, discount workout cash flows, and monitor cure and repeat-default outcomes.