This report delves into various aspects of credit risk within the context of bank financial risk management (BK7019). It explains systematic credit risk, focusing on its impact on borrowers and investors, and discusses methods for evaluating default rates and creditworthiness. The report includes calculations of cumulative and yearly mortality rates for A-rated and B-rated loans. It further examines the use of migration analysis in identifying credit risk in sectoral loans, highlighting its benefits for financial institutions in adjusting risk ratings and meeting regulatory requirements. Finally, the report addresses sovereign risk, explaining how foreign government interventions can affect debt repayments and the risks faced by foreign investors. Desklib offers a range of resources, including past papers and solved assignments, to support students in mastering these concepts.