CREDIT AND COUNTERPARTY

RISK MANAGER CERTIFICATE

CANDIDATE GUIDEBOOK
The Industry Standard for Credit Risk Practitioners
 EXECUTIVE SUMMARY
Credit risk is traditionally defined as the risk that an obligor will not be able to
honor its (often long-dated) obligations, and has mostly been applied to the fixed
income world and, more specifically, to bank lending. It is binary in nature on a
single asset that either defaults or does not default, and the consideration of
portfolio effects is always crucial for risk analysis. More recently, the nature of
what is being considered credit risk has changed; nowadays, deterioration in credit
quality short of a default is often considered part of credit risk, and derivative
counterparty risk has become much more important. The particularity of the latter is that it operates on
a time-varying notional (e.g. consider an interest rate swap or an FX forward where one counterparty
owes the other one money, depending on market movements) and is highly dependent on correlations.

The Credit and Counterparty Risk Manager (CCRM) Certificate is relevant to all risk-related roles in
financial services, in particular Credit Risk Staff, Financial Controllers, Operations and Technology
Managers, and Compliance and Legal Officers.

The Credit and Counterparty Risk Manager exam consists of 60 questions. The syllabus is based on the
PRMIA Credit and Counterparty Risk Manager Handbook.

Enrollment for the program is via the PRMIA website, and taking the exam is designed to suit the needs
of the busy risk professional. Be sure to read this entire document to view important information that
will help you to be a successful candidate.

We hope that you will join us in promoting the CCRM program as the standard for our industry and that
you will join in our efforts to ensure that it will continue to meet the needs of our members and our
industry.

CONTENTS
1 EXECUTIVE SUMMARY
2 PROGRAM DESIGN
2 PROGRAM DATES
AND LOCATIONS
3 FEES AND REGISTRATION
3 TAKING THE CREDIT AND
COUNTERPARTY RISK
MANAGER EXAM
5 CREDIT AND COUNTERPARTY
RISK MANAGER SYLLABUS
6 PREPARING FOR THE
CREDIT AND COUNTERPARTY
RISK MANAGER EXAM
PROGRAM DESIGN
DESIGN RATIONALE
The Credit and Counterparty Risk Manager Certificate
program was created at the instigation of PRMIA
members holding senior positions in the industry who
felt there was a gap in the market. It has been
designed by industry leaders, all PRMIA members.
PRMIA CCRM is designed to deliver a deep, practical
understanding of credit risk analysis frameworks and
how to deploy them and act on them in practice in
financial institutions. Successful candidates will be
better prepared to implement meaningful risk
assessment initiatives, produce useful risk manage-
ment information and understand the key modeling
techniques for credit risk measurement. In addition,
they must commit to further uphold the highest
professional and ethical standards as defined by the
PRMIA Standards of Best Practice, Conduct and
Ethics.
KEY LEARNING OBJECTIVES
Those who pass the CCRM exam will
be able to:
Understand the different sources from where
credit risk can arise
Understand how different definitions of credit
risk leads to different results
Design a coherent framework for credit and
market risk with neither risks left out nor
double counting
Understand which level of analysis is
appropriate for which institution
Understand risk mitigation how it works, what
the residual risks are, and how it should be
included within the models
Qualitatively understand the impact of the
different risk drivers and validate the model
results using back-of-the-envelope calculations
Understand the high level software and system
implications of the different modeling choices

READING MATERIAL
PRMIA Credit and Counterparty
Risk Manager Handbook

PROGRAM DATES AND LOCATIONS

For your convenience, the exam is offered on every business day of the year.
You may request to schedule your exams at any time. There is no advantage to taking your exams
on any particular date. Questions within exams are drawn from a large database of questions and
are administered randomly, creating thousands of unique exam forms, all of comparable difficulty.

PRMIA uses the services of VUE, part of the Pearson Publishing family, to administer the CCRM
exams. Pearson VUE is a professional testing firm that has approximately 6,000 testing centers
in more than 170 countries around the world.

Please note some important details about registration, cancellation, identification requirements
and space availability in the Registration section found on page 3 and 4.

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 FEES AND REGISTRATION
REGISTRATION
Registration for the Credit and Counterparty Risk
FEES Manager involves enrolling in the program.
Fees, relevant to your membership status, are given at Enroll via this link:
www.prmia.org/ccrm www.prmia.org/ccrm

A digital copy of the CCRM Handbook is
included with the program fee.
Payment by credit card is required for online
purchases. Contact certification@prmia.org to
make alternative arrangements.
After you enroll and pay the program fee, an
authorization to test email will be provided to you to
schedule your exam at the center, date and time of
your choice.

PRMIA Sustaining Members receive a

discount on the program fee. Become a 90 DAY RULE
Sustaining Member online at
www.prmia.org/membership Please note that there is a strict PRMIA policy that exams may
NOT be retaken within 90 days of a prior sitting. Any candidate
If you are interested in adopting the CCRM attempt to transgress this policy by whatever means may result in
penalties against the candidate which could include forfeit of any
Certificate as a corporate program, please
PRMIA certifications, fees, and possible expulsion from PRMIA.
contact membership@prmia.org. Special
pricing on program fees and preparatory
materials may be available to your company.

TAKING THE CREDIT AND COUNTERPARTY RISK MANAGER EXAM

EXAM FORMAT
The exams are computer-based. You will not receive any copies of PERSONAL IDENTIFICATION
the questions. No paper may be brought into the testing center;
On the date of your appointment,
however, you will be provided with an erasable board upon request.
arrive at the testing center at least
Once admitted to the testing room, there will be a tutorial that intro- 15 minutes before the scheduled
duces the functionality of the exam and a brief message from PRMIA. start time. You must bring two
After this has been viewed, you may begin your exam. You will be forms of identification with you.
asked multiple-choice questions with four possible responses. There The first must be a current
government-issued ID with your
are no breaks allowed during the exam. The testing system allows
photograph and signature.
you to mark and review questions as long as time is remaining.
Please note that you are unlikely to finish
your exams with substantial extra time. Examples of Acceptable Forms of Government Issued ID
You are encouraged to use the tutorial in Drivers License National Identity Card

an expedient manner, but sufficient time is Passport Military ID

allocated for you to complete the tutorial Examples of Acceptable Forms of Supplemental ID
and the exam. Credit Card Employee ID Card

Examples of Unacceptable Forms of ID

Library Card Social Security Card

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 ARRIVE ON TIME
It is very important that you leave enough time
to arrive at the testing center early.
Candidates that arrive late to the test center
may not be permitted to test. The full charge
for the exam will be made if you are not
admitted for any reason. As these centers
offer exams for other organizations as well,
not everyone in the room will be taking the
same exam, so no assumptions should be
made about when other candidates enter
or leave the testing center.
CANCELLATIONS/CHANGES
In recognition of the busy and changing
schedules of risk managers, you may change
your exam appointment without charge
through the Pearson Vue system at
www.pearsonvue.com/prmia. Please note that
all change requests must be made at least
one business day before the testing date or
the entire exam fee will be forfeited.
Because of the flexibility in rescheduling,
exam fees are non-refundable.

EXAMINATION ADMINISTRATION
Each testing center has an administrator who can assist candidates
with any questions that they may have. In the event of any incident
(computer failure, inadequate supplies, excessive noise, or any other EXAM SECURITY
circumstance) which the candidate believes is not compatible with
The Credit and Counterparty
good examination conditions, this must be brought to the attention of
Risk Manager exam is conduct-
the examination proctor immediately upon the incident being noticed
ed under secure conditions. Any
without continuing the exam. Failure to inform the proctor in this
attempt by candidates to copy
manner will invalidate any subsequent candidate incident reporting
questions, by any means includ-
which cannot be substantiated by the test center.
ing unorganized memorizing,
Your exam results should be available within 15 business days of your and to distribute these questions
test date and will be delivered to you via the PRMIA website which to other individuals, will be
you can access by logging in to the PRMIA website. You will find the treated as unethical behavior
results within "My Profile." and may result in penalties
against the candidate which
could include forfeit of any
PRMIA certifications, fees, and
possible expulsion from PRMIA.
Indictment to copy, and usage of
copied questions may also result
in the same penalties.

CALCULATORS
An online scientific calculator, Texas
Instrument TI308XS, is part of the test
delivery system. No other materials may be
brought into the exam room with you. It is
suggested that candidates purchase the
hand-held version (TI-30XS) to fully
familiarize themselves with the calculator.

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 CREDIT AND COUNTERPARTY RISK MANAGER
CERTIFICATE SYLLABUS
Credit Risk

Chapter 1 Classic Credit Products Counterparty Risk

Important Credit Instruments
Building Blocks Chapter 7 Basics of Counterparty Risk
Instruments Historical Perspective
The OTC Derivative Market
Chapter 2 Classic Credit Life Cycle Exposure Measurement
Introduction/Basics Risk Appetite
Origination Phase
Credit Risk Assessment Chapter 8 Risk Mitigation
Monitoring Phase Documentation
Workout Phase Netting
Other Considerations Collateral
Clearing
Chapter 3 Classic Credit Risk Methodology Compression
Introduction and Setting the Scene Guarantees, Intermediation,
Fundamental Credit Analysis and Credit Insurance
Analyzing Wholesale Credit
Analyzing Retail Credit Chapter 9 Credit Valuation Adjustment, CVA
Conclusion: Classic vs. Modern Credit CVA Definition and Calculating CVA
Analysis Methodologies Debit Valuation Adjustment, DVA
Wrong-way Risk
Chapter 4 Credit Derivatives and Securitization Organizational Challenge
Structured Credit as A Funding Tool
Linear Credit Risk Transfer Chapter 10 CVA-related Aspects
Structured Credit as a Risk Management Tool Toward XVA
Bespoke Structured Credit Funding Valuation Adjustment, FVA
Capital
Chapter 5 Modern Credit Risk Modeling Leverage Ratio
Credit Risk Parameters Liquidity Ratios
Credit VaR Models
Implementation Chapter 11 Managing Counterparty Risk
Modeling Credit Risk Mitigation and CVA
Risk Allocation and Performance Hedging CVA
Management Central Clearing Counterparties (CCP)
Managing Distressed Names and Defaults
Chapter 6 Credit Portfolio Management (CPM)
CPM Goals and Philosophy
CPM Instruments
CPM Analytics
CPM in Practice

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SYLLABUS SUMMARY
Number of Questions Percentage
in the Exam of the Exam
Chapter
1 Classic Credit Products 6 11%
2 Classic Credit Life Cycle 5 7%
3 Classic Credit Risk Methodology 7 16%
4 Credit Derivatives and Securitization 7 15%
5 Modern Credit Risk Modeling 7 15%
6 Credit Portfolio Management 6 8%
7 Basics of Counterparty Risk 4 5%
8 Risk Mitigation 4 5%
9 Credit Valuation Adjustment (CVA) 6 7%
10 CVA-related Aspects Toward XVA 4 6%
11 Managing Counterparty Risk and CVA 4 5%
Total 60 100%

Managing Counterparty
Risk and CVA
CVA-related Aspects
Toward XVA
Credit Valuation
5%
Classic Credit Products
Adjustment (CVA)
6% 11% Classic Credit Life Cycle
Risk Mitigation 7% 7%
5%
Basics of Classic Credit Risk
Counterparty Risk 5% 16% Methodology
8%
Credit Portfolio
Management
15% 15%
Modern Credit Credit Derivatives
Risk Modeling and Securitization

PREPARING FOR THE EXAM

REQUIRED RESOURCE

PRMIA Credit and Counterparty Risk Manager Handbook

This guidebook will lead you through the main study points of the exam.

The Credit and Counterparty Risk Manager Handbook is a best practices guide to all
elements needed for the successful implementation of an effective risk management
framework and the management of credit risk. Designed to deliver a deep, practical
understanding of credit risk analysis and management, risk management frameworks
and measurement methodologies in financial institutions, the Handbook is written by
an all-practitioner author team from major financial institutions around the globe.

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