Abstract: The paper shows how introducing economic variables into a credit scorecard improves the predictive power of the scorecard. Such a scorecard can forecast default rates accurately even when economic conditions change This means one can develop a single step approach to estimating the Point in Time PDs which are requirements of the Basel Accord banking regulations. A one step approach ha...

Profit was defined as a function of the genotype of animals and variables controlled by management. Alternative parameterizations of management variables were examined to compare the effect of controlling age at slaughter, weight at slaughter, or fat depth at slaughter. The various parameterizations are shown to result in equivalent economic weights for genetic variables, provided management va...