Answer
May 12, 2025 - 07:31 AM
The TTC PD, or Through-The-Cycle Probability of Default, is calculated by estimating the likelihood of a borrower defaulting on their debt obligations over a complete economic cycle. Unlike Point-In-Time (PIT) PD, which reflects current economic conditions, TTC PD aims to provide a more stable measure by smoothing out cyclical fluctuations and focusing on long-term default risk. This is typically achieved through historical analysis and modeling that incorporates various economic scenarios and borrower characteristics.
